IMA Educational Case Journal
Volume 3, Issue 4
Bridgestone Behavioral Health Center: Cost-Volume-Profit (CVP) Analysis for Planning and Control
Ronald Kucic, James E. Sorensen, Lisa M. Victoravich
The purpose of the case is to apply cost-volume-profit (analysis) in a service industry setting with multiple lines of service. The case emphasizes the use of CVP analysis for planning and control purposes. The executive director at Bridgestone Behavioral Health and Addiction Center is concerned about the Center’s financial performance. As a result, he would like to implement a methodology to plan, monitor, and control the Center’s financial performance. Students are encouraged to apply CVP analysis and to provide both an interpretation and strategy for monitoring the Center’s future performance.
Keywords: CVP analysis, weighted average contribution margin (WACC), multiple product break-even analysis, service industry, health care, and nonprofit.
City of Waterloo, Iowa: Organizing a Chief Financial Officer Function
William F. Bowlin, Margaret L. Andersen
This case illustrates some of the issues associated with organizing a finance/accounting office. The students are to assume that they have been hired by the City of Waterloo as a consultant to review its finance activity organizational structure and make recommendations as to how the finance and accounting activities should be organizationally structured. The case requires that the students understand the duties and responsibilities normally associated with an accounting and finance activity and the concepts associated with organizational structure and behavior as well as how to apply these concepts. Other topics that can be addressed with this case are ethics, media coverage of government operations, balanced scorecard, and internal controls.
Keywords: finance office organization, government operations, balanced scorecard, and internal controls.
Appaloosa Day Care Center, Inc. (ACDC)
Kristen Irwin, Debra Kerby, Sandra Weber
Small not-for-profit service organizations frequently do not have professional staff or board members who can organize and analyze cost information to determine how effectively or efficiently services are being provided. Nor may these organizations price their services to recover costs or break even. This case requires students to analyze the activities, costs, and services provided by a community-based not-for-profit daycare center to determine whether the center’s programs are self sustaining. Students are challenged to apply activity-based costing concepts to complete the analysis and to provide the center with recommendations for improving its financial performance.
Keywords: activities, activity-based costing, and cost allocation.