Assignment Managerial Accounting (DOC)
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Added on 2020-04-29
Assignment Managerial Accounting (DOC)
Added on 2020-04-29
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Running head: MANAGERIAL ACCOUNTINGManagerial AccountingStudent’s Name:University Name:Author Note
1MANAGERIAL ACCOUNTINGTable of ContentsAnswer to Question 1.................................................................................................................2Notes......................................................................................................................................2Answer to Question 2.................................................................................................................3Notes......................................................................................................................................4Answer to Question 3.................................................................................................................4Notes......................................................................................................................................5Answer to Question 4.................................................................................................................5Answer to Question 5.................................................................................................................6Answer to Question 6.................................................................................................................7References..............................................................................................................................8
2MANAGERIAL ACCOUNTINGAnswer to Question 1The issue presented in the question is that the movie Forrest Gump became ablockbuster hit and also received the academy awards in the year of 1994 and though itclaimed to do a worldwide business of $661 million but Paramount claimed that it did notturn out to be a money-maker for the company. This is because according to the statementsprepared by Paramount led to a net loss of 107 million.Statement of Profit and LossForrest GumpParticularsNotes$ (in millions)$ (in millions)Box Office Gross Revenue1382Less: Amount kept the movie theatres (50%)2-191Gross revenue of Paramount191Less: Negative CostsProduction Costs112Gross participation of profit among the actors 330.6Production Overhead 14.6Cost of promotion 67Advertising Overhead Charge46.7Distribution Fee561.1Total Operating Costs292Operating Profit (Loss)-101Less: Interest amount charged by Paramount-6Total Net Loss-107NotesNote 1 – The total gross revenue that is earned by the movie amounts to $382 million.Note 2 – As stated in the contract, the total gross revenue earned by the movie has tobe divided between the movie theatres and Paramount, therefore the total gross revenue isdivided into half that is ($382 million/2) 191 million.
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