Managerial accounting helps one understand what it takes to be successful in any business.  A case in point are the ever popular sports franchises, of all kinds.  Now what little I understand about sports is this.

Fans come to see players and teams win, not to lose.  One has to attract winning talent.  It seems to me that the team that attracts the most winning talent at the least cost has the lowest fixed cost to overcome. Hence their prices can be lower to attract the same number of fans. Remember break even equals fixed cost divided by contribution margin.

Our first case in point is the Detroit Tigers.  This is a particularly interesting story in that Mike Illitch turned around the Red Wing hockey team and has made big bucks with Little Caesars Pizza.  His front office at the Tigers baseball team however just did not pick winners. So he got  a new front office team and started hiring players. The Detroit record was so bad that only injured big names started showing interest.  So that is who he hired.  Read the article to learn how it turned out.

Meanwhile the Ladies Porf Golf Assoc needed a make over. This article is particularly interesting as to its insight on how one make’s money with a golf tour, especially through television. The Commissioner is fighting to regain control of all their tournaments.  And this is clearly a tough business, no wallflowers need apply-read about tough negotiator Carolyn Bivens.

Paul Samuelson in his legendary economics textbook observes that most sole proprietorships live and die with their owner.  Hmmm, this is apparently the case with the Earnhardt NASCAR team. Father Dale was killed in a NASCAR crash a few years back. Now son Dale Jr. has inherited trophy wife and mother in law Teresa.  Click on the hyper link to the article to see the photos of Dale Jr. and, well, shall we say, Mom. Dale Jr has now won a race in three years and is apparently bolting for another team. Gee you would never know there was a problem to read about her on the Earnhardt website..  More on the

Family Fued here.

Do you have an avatar?  I am not sure I quite understand the virtual social web! Apparently folks are creating the people they really want to be in virtual reality environments. I suppose it is simply an extension of the pop culture media reality, why are so many people interested in Angelina and Brad? I suppose because they don’t wnat to be like Angie and Brad, they want to BE Angie and Brad. Well in virtual world you can do just that.

This is a link to a special that Business Week did on the social web.  I pointed out a few posts back that Playboy was getting into the Facebook business but restricting entry to college students with an .edu in their mail address. Well it seems everyone is getting in on the act now.

Do any of you use such sites to keep up with or inform your friends on the other side of the world?  HOw will social webs and virtual worlds change the way we communicate and view others in the future?  One of the criticisms of our efforts in the Middle East is that we are losing the media war.  Perhaps the US should put more money into a SpaceBook page.

It is surprising that more universities have not grasped this concept to advertise themselves. Most websites of universities are not interactive. They are more like a newspaper or really more like a yellow pages in that they are rarely updated.  That is the excitement of a social web, it is updated all the time.  At least the blog allows me to easily update information and for you to respond quickly.

The article states that a site is just not hip unless it allows for two way sharing of ideas and information.

Well that’s one of the things the blog allows all of you to do, I see Lhamu was posting at 1:08 AM, truly tis is a 24/7 experience!

Here is a letter from an ex Deloitte employee.   My experience is that tis is the more typical complaint of someone who worked for one of the very large accounting firms. They burn out after two or three years. As the writer says, this is why such firms hire so many recent college grads, the turnover is incredible. Despite the glowing claims of a user friendly work place, this is the story I have been hearing since I graduated from college.

This underscores my suggestion that most of you who are a bit older than the typical college grad won’t be going to such places.  That is another reason I think the CMA or CIA would be a better place to start.

What was the A & M Coach thinking in offering a near secret assessment of his players to a select few?  Click and read the article about how he charged $1200 for the inside information on which players were ready. He asked the subscribers to agree not to bet on the games.  So why did Coach Fran think they were subscribing?

What you do speaks louder than what you say, as always.

The latest Forbes 400 list is out.   An examination shows that this is a fluid group with less than 100 of its original members.  Many in fact are self made folks.  And they did not make their money ‘on the backs of the poor’ as many would have you believe.  I don’t find entire issues of magazine with lists of four hundred rich folks interesting, but this capsulation is quite a slice of what is America, and why everyone wants to come here.

Casino City Times says the analogy is apt.  No gaming in Dubai, but it is a hot spot destination for the well to do set in the Middle East.  Managers in the area are taking classes from the Warton School on how to run a business.  Globalization it seems takes many forms.

Meanwhille further east, Hong Kong has decided not to build casinos to compete with Macau. Macau recently surpassed Las Vegas in gaming revenue.  Singapore is about to get in on the game, literaqlly with its own casinos. Wynns and the Sands have built casinos in Macau. What you aren’t familiar with Macau? 

So Vegas goes to the Far East, Dubai studies Vegas, the Univ of Pennsylvania is in Dubai, gee the money is really going round the world.

Click here to read how government investigaors smuggled radioactive material from Canada to the US.  I saw this on tv alst night and googled the article. In fact the investigator said they simply walked it from a rented car on the Canadian Side to a rented car on the US side in a small red duffle bag.  No one stopped them.

What does this have to do with accounting, gladd you asked. The investigators were auditors from the Governmental Accounting  Office.  A couple of weeks back, the GAO issued a report on how well the Iraq government was adhering to benchmarks set by our government.  Today’s auditors do a lot more than just add up numbers!

Fancy cars and jewelry are ways to display wealth or success.  But that does not mean that the ability to make that kind of money necessarily equates to good sense.  So many of the folks that obtain expensive fancy cars get into trouble with them that the results are now on display.  Yep, Wrecked Exotics shows you just how foolish the newly rich can be!

Please be careful in your own driving, you might encounter one of these screwballs that believes having money insulates them from danger!

Facebook turned down a $1 B offer not long ago. Now it is courting investment on the idea that it is worth !10 B. Wow.

MSFT is upping the ante trying to buy the company. Murdoch owns My Space which is making Fox Interactive Media lots of money.  But Facebook is even more popular.  The article points out that at $10 B, facebook has twice the market cap of the New York Times.  Not bad for a new start up web company.  The article goes on to point out that Facebook could become an operating system, yep, there are thousands of widgets and programs designed just for Facebook.  This explains why MSFT wants to buy Facebook, what if folks switch from Office 2007 to Facebook, at least for web surfing and exchanging personal greetings.

And another thing. Facebook and My Space are used for people to post notes and videos and photos of

THEMSELVES.

I have the students in Prof Development read Dale Carnegie’s How to Win Friends.  Carnegie makes the statement that 3/4 of all the people one meets want your sympathy.  He wrote that comment in the 1930s.  The success of these two web sites mirrors Carnegie’s comment from 70 years ago. All these folks are saying Hey World Look at Me!  Everyone believes he or she is the center of the universe!  Just yesterday I received an e mail from a chap who used the personal pronoun I nine times in a short e mail, gee no question as to the real message there!  Facebook creators understand this universal truth, eveyone is interested in themselves…..If we remember that in dealing with people we will all be more successful with them.

Jerry Flint examines the ‘family sedan‘ market in this column.  A studyof managerial accounting gives us the tools to really analyze what Jerry is saying in this article.  Here is my short list of just some of the conepts on display here.

In chapter 16 we studied horizontal analysis. One would use that to further dissect the table on annual sales for two years.

Now think about fixed and variable costs.  He makes the point that big volume means big profit.  Why?  Because as we will see in Chapter 5-6, fixed cost per unit falls with volume.  And the higer sales rise above break even the  more money the firm makes. Imagine how much higher the fixed cost per unit is on the much slower selling Ford Fusion or the Chrysler Sebring than on the Accord. 

Strategy is on display here.  Toyota and GM focus on two models, Honda on one, different strategies in the same market. GM does not offer a four cylinder in the Impala, the Japanese firms do.  Though here Flint is right, the American fours just are not in the same league with the Japanese fours.  Why is that by the way?  The answer in my opinion is that the Japanese honed their small engine skills making in the motorcycle market, particularly Honda.  Americans have no such experience. 

Honda and Toyota now have the kind of brand loyalty that GM and Ford USED to have.  This is a matter of perception, as Dr. Deming observes, people don’t complain, they switch. Once lost markets are hard to regain.

Process costing is on display as well as the adherence to quality standards, that is what keeps folks buying Japanese cars now made in America.  And that is the nightmare GM Ford Chrysler never thought they woudl have, foreign competition in the heartland of America.  Meanwhile the GM workers in Arlington are on stike.  Given the numbers in the table in the article, is this any time for GM workers to strike?  I report, you decide.