Roger Moon Has Just Purchased the Film Studio of a Movie

question 89

Essay

Roger Moon has just purchased the film studio of a movie company that specializes in comedies.He found that the company did not try to estimate the cost of making a movie.Instead,it just gave the producer a budget and told him/her to make a movie within budget.Mr.Moon does not like the former movie-budget concept and desires to establish a formal cost estimation system.
Required:
What are some of the potential problems that may be encountered in changing from a budget to a cost estimation movie making system?

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Definitions:

Advertising

Advertising is the action of calling public attention to products, services, needs, etc., through paid announcements by an identified sponsor.

Business Transaction

Any activity or event that involves the exchange of goods, services, or funds between two or more parties that affects the financial position of a business.

Note

A written agreement or promissory note where one party agrees to pay another under specified conditions, often used in reference to loans or debts.

Assets

Resources owned by a business or individual deemed to have economic value and expected to provide future benefits.