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Ted Mitchell

Both Accrual and Cash Systems Used in Accounting are Inadequate for a Weekly Report on Marketing P erformance. Ted Mitchell. Accounting Systems. 1) Monthly Accrual System Audience is the shareholder Seek to match costs and revenues over time Smooth out the profit picture

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Ted Mitchell

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  1. Both Accrual and Cash Systems Used in Accounting are Inadequatefor a Weekly Report on Marketing Performance Ted Mitchell

  2. Accounting Systems • 1) Monthly Accrual System • Audience is the shareholder • Seek to match costs and revenues over time • Smooth out the profit picture • 2) Weekly Cash Flow System • Audience is the Cost accountant • Records all cash flows

  3. You as Marketing managers will find • The classic monthly accrual-based Accounting Reports • Balance sheet (important for retained earnings) • Income statement • To be inadequate for making profitable marketing decisions • You will be wanting a weekly marketing performance report

  4. Ignore the sunk costs that are accrued each month You will spend between $7,500 and $12,500 in cash into the business in the first month

  5. Marketing Manager in Biz Cafe • Need a Weekly Performance Statement • That identifies the cost of the marketing decisions made in the week and the market’s immediate response to those weekly decisions

  6. You will want to build a weekly marketing manager’s report • On a spreadsheet • constructed for the reporting of a weekly marketing performance It will include: • Price, Demand, Revenues, Cost of Goods Sold, Gross Profit, Direct Marketing Expenses for the Week and Marketing Profit! • Marketing is the amount of profit being contributed to the owners’ net income by the firm’s weekly marketing efforts

  7. Marketing Performance Report for 100 hours of Operation in Week #

  8. Three very useable weekly reports • Provide some information for the Weekly Marketing Report • 1) The Dashboard Report • Cost of Goods Sold, COGS • Gross Profit, G • 2) The Weekly Sales Receipts Report • Demand (Quantity sold), Q • Price Tag(s), P • Revenue, R • 3) The Decision Summary • Servers and Cost of • Advertising, Radio Spots and Cost of

  9. Marketing Performance Report for 100 hours of Operation in Week # You have to calculate your own Marketing Profit, Z

  10. Any Questions on? • 1) Why are the cash system and the accrual systems inadequate for the marketing manager in Biz-Café • 2) Why is in the Weekly Report on Marketing Performance?

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