BS310 / 5152: Managerial Accounting and Control : Case Study- Accounting Assignment

Internal Code : MAS285

Accounting Assignment

Case Study : Playworld is a world-class theme park which opened in Western Australia in December 2010. The park is situated on 30 hectares of ground and was listed on the ASX early in 2011. Playworld has been granted a 199 year lease by the government on the land on which it is situated. The theme park is surrounded by hotels and resorts, and is easily accessible from both the domestic and international airports. The theme park attracts a large number of interstate and international visitors each year. Due to the relatively pleasant year-round climate, the park has always been busy in all seasons of the year. In addition to this, the Australian Government has spent a significant amount of money on promoting tourism to Australia, and Playworld has featured heavily in the promotions and campaigns that have been used. This has seen the number of visitors increase every year since the park was established. Playworld offers the following:

• Amusement park with rides and activities for adults and children of all ages
• Retail outlets and opportunities for several kiosks
•  Event facilities (weddings, conferences, outdoor concerts etc)
• Restaurant and snack bar facilities
•  Animal conservation park where visitors can watch exhibitions, talk to conservation staff and interact with animals
• Outdoor cinema

Playworld has around 900 employees. The CEO, Brett Cowell, has been with Playworld since its inception, and was granted 5% of the shares for his efforts in setting up the company and building the strategic direction of the park. Brett is a hard worker, and is widely regarded by the staff as being a hard task master and sometimes having unrealistic expectations of the staff, but he does reward hard work well, and is always walking around the premises talking to staff and asking them how they think things could be improved. The entrance prices for the animal conservation centre, amusement park and outdoor cinema are structured such that a child entrance fee is 80% of the adult fee, and a concession is 85% of an adult fee. No child or concession prices are available for concert tickets. The stadium in which concerts are held has a capacity of 1,500 people. Rides in the amusement park are charged for in addition to the entrance fee. Customers purchase tokens for rides at a central kiosk, and hand tokens to the ride operator when they take the ride. This ensures that no cash is handled by the ride operators. Animal Conservation The animal conservation park at Playworld is regarded as one of the best in the world because of its immaculate setting and the rare species on view. The director of conservation, Shirley Knott, and her dedicated staff ensure that the animals are kept healthy in accordance with health regulations and laws. They also ensure that grounds are kept clean and maintained to the highest standards. Shirley has been with Playworld for six months. She has a very ‘laid back’ management style, and expects her staff to work in a harmonious and cooperative manner. Their primary focus should always be the welfare of the animals they look after. Operations The Operations division is responsible for marketing Playworld so that visitor numbers are maintained at the highest levels possible. The Events & Functions unit and the Tourism unit work with key contacts throughout the world promoting Playworld as much as possible and ensuring that all press and advertising material recognises Playworld as a key destination to visit in Australia. The Director of Operations, Con Jacks, is very friendly with the minister for tourism, and is in frequent communications with him to ensure the spotlight remains on Playworld as much as possible when Australia is promoted overseas as a tourist destination. Question : The board of directors of Playworld would like to analyse the trends of the business over the past five years, but have been overwhelmed by the volume of data that is given to them on a monthly basis in preparation for their board meetings, and have been unable to determine what the trends have been clearly enough to make decisions for the future of the business. You have been asked to assist in providing an analysis of the information and data in preparation for submissions to the board. Based on the information provided about Playworld in the ‘Key statistics and performance data’ report and the management accounts provided in the case study, you are required to outline what trends you can observe from the data which are useful in assessing performance of the company, including any interrelationships within the data. Your report should be set out in a manner which makes it easy to read and which identifies potential causes for the trends you have observed where possible.