The managing director of PZT Limited, a company owning three cinemas, has complained that the form of presentation of the company’s profit and loss account for the year ended 31st December, 19 3, given below, does not tell him where the loss has been incurred and is of little use for management purposes.

You are given the following information:
(1) The three cinemas are the Astoria, Plaza, and Regal. Each is a large old cinema which has now béen sub-divided into three smaller units, called studios, showing different films.
(2) Each cinema employs:
A manager.
A projectionist who is responsible for the showing of the films in all three studios.
A ticket salesgirl, who sells tickets for all three studios.
An usherette for each of the studios.
An ice-cream etc., salesgirl covering all studios. It is not possible to record the sales made in any one studio.
(3) Films are hired at a cost of 20% of the takings for that film.
(4) Sales of tickets for the year were as follows:

(5) Individual annual salaries are as follows:

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You are required to redesign the profit and loss account so that his objections will be overcome. Sale of tickets 539 800 Sale of ice creams etc Less: Hire of films Salaries: Managers Projectionists Ticket salesgirls 37 000 576 800 107 960 36.000 30 000 12 000 Usherettes 36 000 Ice cream salesgirls 12 000 General cinema costs 180 000 Cost of ice-cream 18 500 Head office costs 160 000 592 460 Trading loss (15 660)