You have just been hired as a trainee accountant by a fashion house, Louis Versailles Ltd. In 2020 at the 25th Mercedes-Benz Fashion Week Louis Versailles Ltd will be holding a fashion parade for which it has a separate account of funds set aside within its promotional budget. This fashion parade will take place under the Sydney Harbour Bridge at Bradfield Park in Milsons Point and will use the services of local a local salon (Wildlife Origin) and local talent. The aim on the fashion parade is for potential customers to see the clothes displayed on models and later on purchase the clothes. A costing for a fashion parade can vary greatly based on the decisions and assumptions made.cost ranges are provided in US dollars:
• Rent of marquee $0 to $100,000
• Hair and makeup: $0 to $100,000
• Stylist: $5,000 to $20,000
• Public relations: $10,000 to $20,000 • Models: $0 to $200,000
• Lighting: $10,000 and higher
• Invitations: $5,000 and higher
Answer the following questions:
(a)Write down the budget for a Louis Versailles Ltd's fashion show at the 25th Mercedes-Benz Fashion Week. Select an estimate for each cost within the range given.
(b) Justify each of your estimates made by describing the assumptions you are making about your imaginary fashion show.
a) BUDGET FOR FASHION SHOW
| item | cost($) |
| rent of marquee | 50,000 |
| Hair and makeup | 40,000 |
| stylist | 10,000 |
| Models | 1,00,000 |
| public relations | 18,000 |
| lighting | 40,000 |
| invitations | 7,000 |
| total | 2,65,000 |
b)
Rent of marquee is estimated at $50,000 because in the fashion show, there will be many marquee representing the clothes everywhere.
As motive of fashion show is to display clothes, cost of hair and make up, stylist is less and expenditure on models is more. Good models with average hair styles or makeup will be representable and as models are better, they know how to display clothes efficiently with their experience and personality.
In the fashion show, there is a need of too much lightings and media coverage, there is more expenditure on lighting and public relations. This will give a good impression on everyone and clothes will look more attractive.
To get more media coverage and more crowd, there is a need of invitations. Expenditure on invitations is on average.
You have just been hired as a trainee accountant by a fashion house, Louis Versailles Ltd....