ISSUES IN ACCOUNTING EDUCATION Vol. 19, No. 4 November 2004 pp. 555–561
The ALLTEL Pavilion Case: Strategy and CVP Analysis
Edward Blocher and Kung H. Chen
ABSTRACT: The ALLTEL Pavilion case is intended for the undergraduate management accounting or cost accounting course and the M.B.A. management accounting course. It provides an excellent context in which to examine strategic issues in using cost volume profit (CVP) in a service business. Based on an actual entertainment pavilion, the case develops many factors unique to a service business and illustrates how pavilion management can use CVP analysis to determine which artists to attract and what kinds of contracts to have with these performers. The Pavilion has two types of…show more content… The Pavilion competes with the RBC Center (http://www.rbccenter.com) at North Carolina State University in Raleigh (NCSU), the Dean Smith Activities Center (http://tarheelblue.ocsn.com/genrel/ 092301aad.html) at The University of North Carolina in Chapel Hill, NC (UNC), and the Verizon Wireless Amphitheater in Charlotte, NC (http://www.verizonwirelessamphitheater.com/charlotte/), among others. In contrast to the facilities at NCSU and UNC that offer only indoor events, the Pavilion offers outdoor as well as sheltered seating for its events. Marketing, Operations, and Accounting When the marketing department plans a promotion for an upcoming event, it coordinates with the sales department to see if there is a conflict in sponsorship. Marketing also coordinates with the operations department to effectively manage the activities on show days. Finally, the budget of each department (sales, marketing, and operations) is reviewed by the accounting department, which provides overall financial management of the project. Bringing Concerts to Reality A concert becomes reality in many steps. First, a group or performer with an interest in performing at ALLTEL will discuss with Cellar Door, Inc. and the Pavilion the possibility of performing at
Issues in Accounting Education, November 2004
The ALLTEL Pavilion Case: Strategy and CVP Analysis
