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Precision Worldwide

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15.963 Management Accounting and Control
Spring 2007

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15.963 Managerial Accounting and Control Spring 2007

Prof. Mozaffar Khan

MIT Sloan School of Management

Main Line vs. Basinger

„

Selected Filmography
„

Kim Basinger
„ „ „ „ „ „ „

Sherilyn Fenn
Novel Romance (2006) Dream Warrior (2004) Darkness Falls (1999) Outside Ozona (1998) Boxing Helena (1993) Backstreet Dreams (1990) The Wild Life (1984)
2

The Sentinel (2006) Cellular (2004) 8 Mile (2002) L.A. Confidential (1997) The Getaway (1994) Batman (1989) Hard Country (1981)

15.963 [Spring 2007]

Managerial Accounting & Control

Main Line vs. Basinger

„

Evaluate the defense argument that Mazzocone “has a duty under the law to minimize his loss, and this does not include going out and making a picture knowing you are $2m short.
„

At what stage in the negotiations did Basinger withdraw?
„

If late, it is possible some costs were contractual obligations (such as rights to script) at the time, and these obligations were assumed with the presumption of Basinger participating.
Managerial Accounting & Control 3

15.963 [Spring 2007]

Main Line vs. Basinger

„

What were Mazzocone’s options following Basinger’s withdrawal?
„ „

Do not make movie – this assumes all costs sunk. Make with another actress – this assumes some cost recoverability.

„

„

„

How does this relate to example in previous class about airline pricing? Evaluate the following claim: “at the time of Basinger’s withdrawal, Mazzocone was faced with a short run decision.” Does loss minimization imply not making the movie, as suggested by the defense?
Managerial Accounting & Control 4

15.963 [Spring…...

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