‘Amitabh’ theatre in Bombay seeks your assistance in price determination. From the following data relating to April 1998, you are requested to
- Compute cost per ‘Man Show’
- Ascertain rates to be charged for each class of seating accommodation.
|
Rs |
|
|
Staff salaries per month |
10,000 |
|
Monthly maintenance and cleaning |
2,500 |
|
Electricity charges per month |
2,000 |
|
Projector room supplies per month |
12,000 |
|
Advertising expenditure per month |
10,000 |
|
Hire charges of print per month |
30,000 |
|
General expenses |
7,000 |
|
Revenue from slides shown per month |
2,000 |
The theatre premises and building are valued at Rs 9,00,000. 6% on the capital cost per annum should be charged as depreciation. Rents collected from stalls in the theatre are Rs 8,400 per year. Depreciation of furniture & projector per month respectively are Rs 1,000 and Rs 500.
During April 1998, four shows with average attendance of 80% were run daily. Out of the seats occupied, 10% represent free passes and owner’s connections.
Entertainment tax 50% of collections
Profit required 50% of net collections
The theatre contains 200 balcony, 300 first class and 500 second class seats. The weightage given is 3, 2, 1 respectively in terms of worth.