Craddock Cup

1. The most important aspect of this case to consider is the relevant vs. fixed costs associated with the Craddock Cup. With the costs shown from the tournament, we can see that there are three expenses that are not relevant costs to the Craddock Cup. These costs are the Soccer Field rent from the city ($1,200), Rivaldo’s Salary ($6,300), and the rent and utilities at ($2,700). These costs are not relevant to the Cup’s expenses as the Craddock Youth Soccer League would incur these costs regardless of the Craddock Cup. This means that a total of $10,200 is sunk costs to CYSL.

Cost Sunk? Fixed/Variable Expense

T-Shirts NO Variable $6 per shirt

Food and Beverages NO Variable $15 per player

Soccer Clinics NO Variable $6 per player per day

Registration Fee NO Fixed $1,500 per year

Insurance Premium NO Variable $4 per player

Soccer Field Rent YES Fixed $1,200

Soccer Balls NO Variable $54 per field

Referees NO Variable $100 per game

Trophies NO Variable $25 per trophy

Scout Hotel NO Variable $80 per night

Face Books NO Variable $6 per book

Marketing NO Fixed $2,200

Rivaldo’s Salary YES Fixed $6,300

Jansten’s Salary NO Fixed $12,000

Rent, Utilities YES Fixed $2,700

2. Part of this case analysis is gauging whether doubling the size of the tournament will increase profitability for CYSL. The analysis with a side by side income sheet is shown below with only the relevant costs to the Craddock Cup. Assumptions that were made to come to this income sheet is the following:

With the additional teams, additional field space and goals are needed. As stated there are still 2 fields which are not being utilized. In addition to these two fields, six fields will be rented from locals schools with twelve goals being rented for 6 days to account for the preparation and clean up associated with the tournament.

Fields = $150 x 6 fields = $900 per day x 6 days = $5,400

Goals = $60 x 6 fields = $360 per day x 6 days = $2,160

$5,400 +...