Hawthorn Leisure Works: Management Accounting Report Analysis

This report provides a comprehensive analysis of Hawthorn Leisure Works' financial performance, focusing on a comparison between its old and proposed new membership structures. The analysis includes detailed calculations of revenue generated from individual, student, and family memberships, as well as court fees during peak and non-peak seasons. The report evaluates the potential revenue increase by adopting a new promotional campaign. The findings reveal that the proposed new structure could significantly boost revenue compared to the existing method. Assumptions regarding membership retention rates are also considered, leading to the conclusion that the new structure is financially advantageous for the company. The report highlights the importance of strategic planning and its impact on revenue generation and business growth in a competitive market. The student assignment provides a clear understanding of the financial implications of different business strategies, making it a valuable resource for students studying management accounting.

Running Head: MANAGEMENT ACCOUNTING FOR PLANNING AND CONTROL 0
Management Accounting for Planning
and Control
(Student Name)

MANAGEMENT ACCOUNTING FOR PLANNING AND CONTROL 1
Table of Contents
Question 2........................................................................................................................................2
Introduction..................................................................................................................................2
Analysis of Situation....................................................................................................................2
Assumptions.............................................................................................................................4
Conclusion...................................................................................................................................4

MANAGEMENT ACCOUNTING FOR PLANNING AND CONTROL 2
Question 2
Introduction
The adopting of new strategy for business plays a vital role for the organization. One of
the scenarios is created in which Hawthorn Leisure Works is planning to adopt new strategy in
its business to enhance the revenue. It offers tennis courts as well as other physical fitness
facilities to its members. Therefore, in the following part there will be detailed analysis of the old
and new plan and revenue occur from such plan. It will help the organization to decide whether
they should adopt proposed structure or continue with the old method to enhance its revenue or
earnings.
Analysis of Situation
In order to analyze the effect of sales revenue that is resulting from the planned change in
the fee structure for the next financial year that start from 1 October to 30 September there are
certain calculations that are explained in the below point:
a) Annual Membership Revenue that is derived from the old membership
Individual members = 2000*25%*45
$ 22,500.00
Student Members= 2000*25%*30
$ 15,000.00
Family Members= 2000*50%*100

MANAGEMENT ACCOUNTING FOR PLANNING AND CONTROL 3
$ 100,000.00
Total $ 137,500.00
Therefore, the annual membership revenue is $ 137500. It mainly come from calculating
the revenue of individual, student as well as family members that represent the sufficient revenue
that is earned by them in an effective and efficient manner.
b) Total Revenue earn from court fees based on old membership
It has been mentioned that there are ten courts in total so the
revenue will be the total of all.
During the peak season which is (181 days)
The primary hours is =
4
hours*10*95%*$12*
181 days)
Therefore, the primary hours = $ 82,536.00
Non Primary Hours=
8
hours*10*55%*$8*1
81 days
Therefore, the non-primary hours= $ 63,712.00

MANAGEMENT ACCOUNTING FOR PLANNING AND CONTROL 4
In order to analyse non-peak season revenue which is 184
days=
12 hours*10*30%*$6*184 days
Therefore, the non-peak season revenue is
$ 39,744.00
Thus, the total court fee is $ 185,992.00
Therefore, while analyzing the revenue from the court fees, it has been found that it has
earned the revenue of $185,992 and the overall revenue that is earned by the Hawthorn Leisure
Works from the method of old membership is $ 323,492.00. It represent that it has earned
sufficient revenue from the old membership.
c) Total revenue earned from structure of new membership
Under Promotional Campaign
Revenue Earned from the Individual= 1000*45%*$250
$ 112,500.00
Revenue Earned from Family 1000*45%*$450
$ 202,500.00

MANAGEMENT ACCOUNTING FOR PLANNING AND CONTROL 5
Total revenue in the case of under
Promotional $ 315,000.00
After Promotion
Revenue earned from Individual 1000*25%*$300
$ 75,000.00
Revenue earned from Family 1000*25%*$500
$ 125,000.00
Total Revenue earned after promotion $ 200,000.00
Total Proposed Revenue = $ 515,000.00
In order to analyze the structure of new membership, it has earned $ 315000 under the
promotional campaign as it will able to attract new clients in an effective and efficient manner.
Furthermore, after promotion it is expected to earn $200000. Therefore, the overall revenue that
will be expected to earn by the Hawthorn Leisure Works will be $515,000. It represent that it
will perform in better manner than the old method.
d) Comparison and evaluation on the revenue of old as well as new plans
In order to compare as well as evaluate the old and new plan it has been analysed that
Hawthorn Leisure Works has earned 323,492.00 from the old method under which it has earned
revenue on the basis of membership which is approximately $ 137,500 and from the court fees, it
has earned $ 185,992.00. Whereas, if Hawthorn Leisure Works will adopt proposed plan then

MANAGEMENT ACCOUNTING FOR PLANNING AND CONTROL 6
it would ale to earn revenue of $515000 in which the revenue under promotional campaign
include $315000 and after promotion it can able to earn $200000. It represent that the company
will earn huge revenue by adopting proposed structure in its business. From the old method it
earns $323492 and from new method it will earn 515000. It shows that Hawthorn Leisure Works
can earn $ 191,508.00 more revenue if it will adopt proposed method. Therefore, the proposed or
new structure will be benefited to the Hawthorn Leisure Works in an effective and efficient
manner. Furthermore, the revenue shall increase to the sufficient level.
Assumptions
It has been assumed that the percentage of continuing the members is similar for each
class of membership
Conclusion
From the above analysis it can be concluded that Hawthorn Leisure Works is planning to
adopt n structure to enhance its revenue. Therefore, after calculating all the revenue structure of
the company, it has been found that the company can able to enhance its revenue by adopting
proposed structure in its business. It will help the company to grow in the competitive market in
an effective and efficient manner.

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