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Five suggestions for improvement of News Company

See the attached file.

Make a Decision

Introduction:

You are the accountant of Selcom News, a local cable provider who offers services such as weekly TV guides and local-area information on weather, restaurants, and movie theaters to its subscribers.

However, its main revenue is from the fees charged from its subscribers and banner advertisements. The following is the revenue data from its last three half-yearly results:

Month/Year Banner Advertising Revenues ($) Actual Number of Subscribers Monthly Fee per Subscription ($)
June 2004 400,988 28,642 14.95
December 2004 833,158 54,813 19.95
June 2005 861,034 58,178 19.95
December 2005 1,478,072 86,437 19.95
June 2006 2,916,962 146,581 19.95

Task(s):
 Identify the five decisions that you would make, based on the information you possess as an accountant.
 Provide pertinent information as to why you would make that decision.
 For each decision, indicate whether you will be acting in a problem-solving, scorekeeping, or attention-directing role. Explain how.

Attachments

Solution Preview

See attached Excel file.

 Identify the five decisions that you would make, based on the information you possess as an accountant.

1. It is advisable to increase the monthly subscription fee by $ 2 .Because, there has been continuous increase of the number of subscribers and the number will increase in the future years also. Therefore, by charging high subscription fee, the revenues can be increased. Here accountant has to act as the attention directing role, because, the growth rate in the number of subscribers is reduced due to increase in subscription rate, he has advise the management to take special efforts to ...

Solution Summary

The answer contains five suggestions for improving subscription, increase in advertsing revenue and growth in overall revenue of News company

$2.19