# The Kalamazoo Zoo Harvard Case Solution & Analysis

## The Kalamazoo Zoo Case Solution

Question 1

The revenues have favorable variance of \$30,000.

The Expenditure Variance is unfavorable with \$250,000.

 Variance Type Actual Budget Variance Favorable/Unfavorable Revenue Variance 850000 820000 30000 Favorable Expenditure Variance 1070000 820000 250000 Unfavorable

Question 2

As per the revenue quantity variance, the actual quantity is that the actual visitors were less than expected,thus this causes variance of \$40,000 which is unfavorable.

However, the ticketing prices charged were higher than the budgeted, which gives favorable variance of \$20,000.

It can also be interpreted that the higher ticket prices might cause reduction in the expected visitors and the overall effect of this is unfavorable.

This analysis can further be interpreted that the zoo should maintain ticketing prices at a certain level so that it can attract more customers. The increase in the number of customers will have high favorable effect than the increase in the prices. Overall, it can be concluded that the increased prices resulted in less visitors and thus, less revenue for the zoo. Moreover, as per the facts of the case the weather conditions might also prevent visitors from visiting the zoo.

 Ticketing Revenue Variance Actual Quantity Budgeted Quantity Budgeted Price Variance Favorable/Unfavorable Quantity 10000 15000 8 -40000 Unfavorable Revenue Variance Actual Price Budgeted Price Actual quantity Variance Favorable/Unfavorable Price 10 8 10000 20000 Favorable

Question 3

The expenditure on food shows an unfavorable quantity variance of \$48000.Similarly, the price variance on food expenditure shows unfavorable variance of \$72000.

While analyzing such variance it can be seen that the quantity of the animals has increased, which is due to the successful breeding program. Thus, the increased number of animals require more food to live. Therefore, the increased animals have caused adverse effect on the budget with increased food expense.

The prices for the food were actually high. The zoo might have estimated wrong prices or the prices for food might increase over the time. There might be budgeting problems as well as budgets could be unrealistic.

 Food expense Expenditure Variance Actual Quantity Budgeted Quantity Budgeted Price Variance Favorable/Unfavorable Quantity 120 100 2400 48000 Unfavorable Expenditure Variance Actual Price Budgeted Price Actual quantity Variance Favorable/Unfavorable Price 3000 2400 120 72000 Unfavorable

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