ep analysis based on capacity usage in and operates a ng facilities, residential ts shop. The summer sease IM8.11 Advanced: CVP analysis based o leisure centre. A local government authorit leisure centre with numerous sporting facilities, resic accommodation, a cafeteria and a sports sho lasts for 20 weeks including a peak period of six weet corresponding to the school holidays. The follo been prepared for the next summer season: Accommodation 60 single rooms let on a daily basis. he school holidays. The following budgets hau 35 double rooms let on a daily basis at 160 per cent of the single room rate. Fixed costs 29 900. Variable costs 4 per single room per day and 6.40 per double room per day. Sports Centre Residential guests each pay 2 per day and casual visitors 3 per day for the use of facilities. Fixed costs 15500 Sports Shop Estimated contribution 1 per person per day. Fixed costs 8250 Cafeteria Estimated contribution 1.50 per person per day. Fixed costs 12750 During the summer season the centre is open seven days a week and the following activity levels are anticipated: Double rooms fully booked for the whole season. Single rooms fully booked for the peak period but at only 80 per cent of capacity during the rest of the season. 30 casual visitors per day on average. ASSESSMENT MATERIAL 193 You are required to: tal calculate the charges for single and double rooms assuming that the authority wishes to make a 10 000 profit on accommodation; (b) calculate the anticipated total profit for the leisure centre as a whole for the season; (10 marks) (c) advise the authority whether an offer of 250 000 from a private leisure company to operate the centre for five years is worthwhile, assuming that the authority uses a 10 per cent cost of capital and operations continue as outlined above. (4 marks) CIMA Stage 3 Management Accounting Techniques