Management Accounting Case Book

Cat & Joe’s Pig Rig: Should We Stay or Should We Go?

Tony Bell, Thompson Rivers University; and Andrew Fergus, Thompson Rivers University

 

CATHY OBERTOWITCH AND JOE THOMPSON HAD JUST RECEIVED AN INVITATION TO bring their food truck, Cat & Joe’s Pig Rig, to a rodeo event in a town 70 kilometers away. They weren’t sure whether attending the special event would be worth their time, effort, and expense or if they would be better off not attending at all and continuing with business as usual.

This case encourages students to analyze the profitability and viability of attending the event and to examine both the financial and nonfinancial aspects of the decision. Students will be called upon to perform breakeven calculations, a target profit analysis, and a “what if?” analysis of the opportunity. This case represents a straightforward, real-world application of Cost-Volume-Profit (CVP) analysis.

This case was designed for use in the CVP module of an introductory management accounting course. It can be used at both the undergraduate and graduate levels.

Keywords: CVP analysis, breakeven analysis, food trucks, what-if analysis.

Cat & Joe’s Pig Rig: Should We Stay or Should We Go?

Tony BellThompson Rivers University

Andrew FergusThompson Rivers University

INTRODUCTION

When the invitation arrived, Joe Thompson and Cathy (Cat) Obertowitch were not sure what to do. The event looked promising, but the last time they agreed to attend a similar special event, they had barely broke ...