WMBA 6050 Week 8 Corrected Analysis and Reflection Example

The Corrected Analysis and What Changed in How I Read Numbers: Reconciling a Golf Club's Cost Split to Its Income Statement, Repricing the Saturday Tournament and Reflecting on Three Conclusions Reached Too Fast

Student Name

Walden University

WMBA 6050: Accounting for Management Decision Making

Instructor Name

Month Day, Year

The Corrected Analysis and What Changed in How I Read Numbers: Reconciling a Golf Club's Cost Split to Its Income Statement, Repricing the Saturday Tournament and Reflecting on Three Conclusions Reached Too Fast

Corrections to the Term's Analysis

This final submission revisits the analysis of Briar Hollow, the fictional golf and banquet club studied this term, and corrects three points raised in feedback or found on review.

The largest correction concerns the cost split. My first draft of the Week 3 cost-volume-profit workup used monthly course costs that, when added up for the year, exceeded what the Week 1 income statement allowed: the course costs alone, plus food and beverage, the pro shop, depreciation and shared costs, came to more than the club's total expenses. The figures could not all be true. The corrected split ($14.65 a round variable; $155,170 fixed per open month) now ties out to the income statement, and the corrected break-even for the full season is about 16,420 rounds, not the 30,000 or so my draft produced. That change reversed the story: across a full season the course earns well beyond what its fixed costs require, and the early-opening question became a close call that depends on the weather rather than a clear rejection.

The second correction is to the Week 7 tournament decision. The first version compared contribution only and recommended accepting the Saturday offer by a margin of about $3,450. Feedback asked what the analysis left out. The revised version adds the risk to season pass renewals from displacing about 60 pass holders on a peak Saturday, which is enough to reverse the recommendation, and adds a Monday alternative that is far more profitable.

The third correction is smaller. The Week 2 memo compared the club's operating margin with sector figures for publicly traded recreation companies without saying clearly enough that those companies are large and diverse. The revised memo states the limitation in the table note and in the text, so the owner does not read the comparison as more precise than it is.

The Corrected Figures in One Place

Table 1

Key Figures Before and After Correction

Composite figures.

Reflection: What Changed in How I Handle Financial Evidence

I began this course believing that my weakness was arithmetic. It was not. My errors came from accepting figures too quickly and from reaching conclusions before testing them against other figures I already had.

A figure I would now question

The figure I would question first is any cost per unit that includes allocated costs. Before this course, I would have accepted the controller's $58 full cost per round as the cost of a round. I now see it as a mixture: about $15 of costs that actually change with a round and about $43 of costs that would be incurred whether the round was played or not. Datar and Rajan (2021) emphasize that the right cost depends on the decision, and a single cost per unit cannot serve every decision. I would now ask, for any per-unit cost I am shown, which parts of it would change if the unit were not produced.

A conclusion I reached too fast

In July, I accepted the general manager's view that rain explained the shortfall. It felt right, because it had rained. The flexible budget showed that a third of the miss came from decisions, including the twilight rate and banquet crew sizes. I reached the weather conclusion because it was plausible and because it blamed no one, including me. I would now treat a plausible explanation that blames no one as a reason to look harder, not a reason to stop.

My first cost split is another example. I built it from monthly figures that looked reasonable on their own and never checked that they added up to the statements I had read in Week 1. Checking whether a figure is consistent with other figures I already have is now the first thing I do.

A decision I would now make differently

Last spring, before this course, I supported buying new patio furniture for the restaurant from operating cash in March, when the club's cash was already committed to irrigation work and customer deposits. I thought of it as a small purchase. I would now look at the cash budget first, and I would have seen that March is the low point of the year, when the club holds deposits it has not earned. Arkes and Blumer (1985) showed how earlier commitments can pull later decisions along; in my case the commitment was to a plan for the patio made the previous fall, and I followed it without asking whether the club's position had changed.

How the Corrections Change the Advice to the Owner

Taken together, the corrections change what the owner should hear. The golf operation is healthier than my first workup suggested, so the case for cutting course spending to protect margins is weaker than it looked. The club's main financial risk is the one the Week 2 ratios exposed, cash that no longer covers deposits and near-term bills, and the term loan for irrigation remains the most important recommendation of the term. The tournament correction is smaller in dollars but larger in principle: a decision that looks profitable in a contribution table can still be wrong if it damages the club's most loyal customers.

Habits for Next Season's Budget

In practical terms, three habits will change. I will reconcile any cost analysis to the income statement before presenting it. I will separate variable from fixed costs before discussing any per-unit figure. And I will ask, for every variance I am responsible for, which part I could have controlled, before anyone else asks me, which is the question the controllability principle places at the center of fair performance evaluation (Merchant & Van der Stede, 2017). The food and beverage department's own budget for next season is the first place these habits will be tested.

References

Arkes, H. R., & Blumer, C. (1985). The psychology of sunk cost. Organizational Behavior and Human Decision Processes, 35(1), 124-140. https://doi.org/10.1016/0749-5978(85)90049-4

Datar, S. M., & Rajan, M. V. (2021). Horngren's cost accounting: A managerial emphasis (17th ed.). Pearson.

Merchant, K. A., & Van der Stede, W. A. (2017). Management control systems: Performance measurement, evaluation and incentives (4th ed.). Pearson.