The requirements

Madison Fulton is the manager of Stanford's traditional Sunday Flicks, sponsored by the Stanford Student Association. The admission price is deliberately set at a very low $3.25. Each Sunday, a film has two showings and a maximum of 400 tickets can be sold for each showing. The rental of the auditorium is $260 and labor is $400, including $100 for Fulton. Fulton must pay the film distributor a guarantee, ranging from $250 to $900, 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, Fulton screened The Descendants. The film grossed $1,840. The guarantee to the distributor was $760, or 40% of gross admission receipts, whichever is higher. What operating income was produced for the Student Association? Film Total Refreshments 1,840 $ 184 $ Revenues from admissions $ 2,024 760 Variable costs 92 852 $ 1,080 $ 92 $ 1,172 Contribution margin Fixed costs: Auditorium rental $ 260 Labor 400 660 512 Operating income Requirement 2. Recompute the results if the film grossed $1,700. (Round your answers to the nearest whole dollar. Use parentheses or a minus sign for an operating loss.) Film Refreshments Total Revenues from admissions Variable costs Contribution margin Fixed costs: Auditorium rental Labor Operating income 1. On June 3, Fulton screened The Descendants. The film grossed $1,840. The guarantee to the distributor was $760, or 40% of gross admission receipts, whichever is higher. What operating income was produced for the Student Association? 2. Recompute the results if the film grossed $1,700. 3. The "four-wall" concept is increasingly being adopted by movie producers. In this plan, the movie's producer pays a guaranteed fixed rental to the theater owner for, say, a week's showing of a movie and the producer receives the ticket receipts less the fixed rental. As a theater owner, how would you evaluate a "four-wall" offer