Part A Henry Ford had some innovative ideas about costs and pricing. Discuss these ideas in the context of modern manufacturing. Part B The local City Council is thinking of starting a small Civic Cinema which shows niche market and avant- garde films by not so famous auteurs (authors) and directors. The City Council hope that it will be at least self-supporting after the initial investment. The data for the cinema is shown below: Item Fixed Costs Sale Price of Tickets Number of Seats Utilisation factor Number of showings a day Number of days open p.a. Variable costs p.a. Details 60,000 p.a. 5.00 per ticket on average 120 seats 0.75 (75%) 3 showings per day 250 days p.a. 300,000 p.a. You are acting as a consultant to the local City Council and are required to answer the following questions: (i) What is the achieved capacity of the Civic Cinema per day and per year (noting that the Civic Cinema is only open for 250 days per year)? (ii) What is the sales revenue of the Civic Cinema per year? (iii) What is the contribution per year and contribution per ticket from the figures given above? (iv) Calculate the breakeven points (a) in s; (b) as a percentage of sales; and (c) in number of tickets sold. (v) Calculate the profit or loss (PBIT) during a year for the Civic Cinema. (vi) What price would the tickets need to be to break-even in a financial year? (vii) What price would the tickets need to be to generate 35,000 profit per year if the current utilisation of 75% could not be improved? (viii) Comment on your answer.