Gina Morrison is the manager of Ashford's traditional Sunday Flicks, sponsored by the Ashford Student Association. The admission price is deliberately set at a very low $1.25. Each Sunday, a film has two showings and a maximum of 1,000 tickets can be sold for each showing. The rental of the auditorium is $400 and labor is $360, including $50 for Morrison. Morrison must pay the film distributor a guarantee, ranging from $330 to $1,100, or 40% of gross admission receipts, whichever is higher. Before and during the show, she sells refreshments; these sales average 10% of gross admission receipts and yield a contribution margin of 50%. Read the requirements. Requirement 1. On June 3, Morrison screened The Descendants. The film grossed $1,660. The guarantee to the distributor was $840, or 40% of gross admission receipts, whichever is higher. What operating income was produced for the Student Association? Revenues from admissions Variable costs Contribution margin Fixed costs: Auditorium rental Labor Operating income 400 360 Film 1660 664 Refreshments 166 83 Total 1826 747