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1. Bryan Bessner has invested $750,000 in a small theatre. He would like to see a There are many costs involved in running a theatre. Estimates indicate that variable costs will use up 54% of the revenue camed by the theatre. Fixed costs would be: Also, depreciation on the theatre building itself would be 10% of the bailding's $1,000,000 book value. Part of Bryan's investment in the theatre was used to buy equipment this year, costing $175,000. This equipment depreciates by 20% per year. Part of Bryan's investment in the theatre came through a bank loan of $200,000, on which he will be paying 8% interest this year. REQUIRED: a. Please calculate the total amount of revenue that this theatre will need to eirn this year, in order to meet all costs and allow for Bryan's expected after-tax return. Show your work. (more space next page) Revere Calwlation: 4,000 Affere foif Net-Profit = \$ 750,000 1) \& 750,000.06=$45,000 Are Bore 100 c. Tranche Pricing Information: Tranche 1: VIP seats 10% of all seats, paying top ticket price Tranche 2: Upper Medium seats 40% of all seats, getting a discount of 25% off top ticket price Tranche 3: Lower Medium seats 15% of all seats, getting a discount of 35% off top ticket price Tranche 4: Bargain seats: the remaining seats, getting a discount of 50% off top ticket price Please calculate (and show details) the 4 prices at which tickets will be sold in Bryan's theatre this year. c. Would you want to investigate the Housekeeping Cost Variance, and if so, what would you say to the head of this department? (If you do not believe that this variance should be investigated, you may answer by saying this, but in that case, please explain why.) 1. Bryan Bessner has invested $750,000 in a small theatre. He would like to see a There are many costs involved in running a theatre. Estimates indicate that variable costs will use up 54% of the revenue camed by the theatre. Fixed costs would be: Also, depreciation on the theatre building itself would be 10% of the bailding's $1,000,000 book value. Part of Bryan's investment in the theatre was used to buy equipment this year, costing $175,000. This equipment depreciates by 20% per year. Part of Bryan's investment in the theatre came through a bank loan of $200,000, on which he will be paying 8% interest this year. REQUIRED: a. Please calculate the total amount of revenue that this theatre will need to eirn this year, in order to meet all costs and allow for Bryan's expected after-tax return. Show your work. (more space next page) Revere Calwlation: 4,000 Affere foif Net-Profit = \$ 750,000 1) \& 750,000.06=$45,000 Are Bore 100 c. Tranche Pricing Information: Tranche 1: VIP seats 10% of all seats, paying top ticket price Tranche 2: Upper Medium seats 40% of all seats, getting a discount of 25% off top ticket price Tranche 3: Lower Medium seats 15% of all seats, getting a discount of 35% off top ticket price Tranche 4: Bargain seats: the remaining seats, getting a discount of 50% off top ticket price Please calculate (and show details) the 4 prices at which tickets will be sold in Bryan's theatre this year. c. Would you want to investigate the Housekeeping Cost Variance, and if so, what would you say to the head of this department? (If you do not believe that this variance should be investigated, you may answer by saying this, but in that case, please explain why.)

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