Real-Life Math
"Who knew that I would actually use all that information I learned
when I was taking financial classes in college," you think to yourself as
you stare at the budget in front of you. In your position as a director of
player operations, you've found yourself dealing with budgets hundreds of
times.
This particular budget is for fund-raising expenses for the
year. It allows your team to spend $800,000 on all of the fund-raisers that
will take place before, during and after the regular season. What you have
to do is determine which event gets how much funding, and how that funding
should be spent.
At first glance, $800,000 seems like a generous budget.
But when you consider that amount has to provide marketing, supplies, staff,
food and any other expenses incurred for 12 different fund-raising events,
the budget doesn't go far.
What makes it even more difficult is that
each of the different events has its own budget built out of a percentage
of that $800,000, depending on the event and the size of the event. Here's
how it's broken down:
- 1 event is allowed 15 percent
- 1 event is allowed 12 percent
- 1 event is allowed 11 percent
- 1 event is allowed 10 percent
- 3 events are allowed 8 percent
- 1 event is allowed 7 percent
- 1 event is allowed 6 percent
- 3 events are allowed 5 percent
For each event, the budget is further broken down according to expense
categories. Here's how it looks:
- 25 percent will be spent on food
- 37 percent will be spent on advertising
- 18 percent will be spent on renting facilities and equipment for the fund-raiser
- 10 percent will be spent on labor
- 10 percent will be spent on other miscellaneous expenses
What will the budget look like for the largest fund-raising event
of the year?