The customer The attraction has four types of customers. Full-price, member, promotional discount, and complimentary. Prices Full-price Discount Member Comp 19.95 20% off Twice the price but visit an average of 5 times per year Some visitors come in on a complimentary ticket Attendance Total annual attendance is 1 million people. Only 15% pay full price and 15% get in for free. In the year of operation, the attraction will sell 40,000 annual passes (remember each pass is equal to 5 visits). The rest of the attendance comes in on a promotion. (Hint: Determine the attendance and revenue for each customer type. Total the revenues and divide by 1 million to determine the average price paid by all visitors - call the gate per cap. The trickiest part is for the members - determine attendance, but use the # of passes multiplied by the pass price to determine revenue for this customer type) Other revenue The food sold at the attraction brings in $10 per cap and has a 30% cost of sales. Expenses Labor is 100 salaried people at $40,000 each. Hourly labor - labor hours per attendee is.80. Use this to compute hourly labor hours. The average hourly rate is $10 per hour. Operating expenses are $500,000 fixed and $2 per cap variable. Marketing costs are $100,000 for the first 500,000 visitors and $1 per cap after that DT&I (Depreciation, taxes and insurance) is $1 million per year. PART TWO: a) Calculate the average price (per cap) for admissions. b) Determine the breakeven # of attendees (Hint: divide contribution margin by 1 million visitors to determine CM). Suggestion for determining the gate revenue section of the income statement Remember quantity x price = revenue Quantity is called attendance in the theme park industry Selling price is called per cap (per capita means per head) Create a revenue table that looks something like this Type of Ticket Attendance Admissions Per Cap Revenue Full Price Discount Member Comp Total 1,000,000 Hint: The check figure is 12.57 for total admissions per cap This is also total revenue divided by 1 milion Income Statement For the year ended December 31 Revenue Full Price Customers Annual Pass Discount Sale of Food Less: Cost of Food Sold Labor Wages Variable Operating Expenses Marketing Cost 1,000,000 5,000,000 Contribution Margin Salaries Fixed Operating Expenses Depreciation, taxes, insurance Net Income 2,992,500 1,596,000 10,533,600 10,000,000 3,000,000 80,000,000 20,000,000 6,000,000 11,522,100 40,000,000 5,000,000 10,000,000 6,022, 100