Tonys Tri-Plex Theater is a single-location, three-screen theatre located in a small town in south-eastern New Mexico. Anthony Martinez bought the theatre a year ago and hired Kevin Martinez, his nephew, to manage it. Anthony has been concerned, however, because the theatre is not as profitable as he had thought it would be. He suspects the theatre has some control problems and has asked you, a friend and graduate accounting student, to bring your knowledge to bear and provide some suggestions. After observing several business cycles, you have compiled the following notes:

General Observations

1. There are two ticket booths at the front of the theatre where customers may purchase their tickets.
2. The theatre uses general admission seating (seats are not assigned).
3. The tickets are color-coded to indicate to which movie the customer has purchased admission.
4. The tickets are dated and stamped good on day of sale only.
5. The tickets are differentially priced for adults, children, matinees, and evenings.
6. The tickets are prenumbered serially.
7. The number of tickets sold each day at each price point for each movie can be determined by subtracting the number of the first ticket sold from the ending number.
8. The amounts of cash collected is counted daily and compared with the total value of tickets sold.

Specific Observations

1. Although the amounts of cash collected is counted daily and compared with the total value of the tickets sold, the cash counts almost always reveal less cash than the amounts that should have been collected. The discrepancies are generally small, less than $10 per cashier. However, one cashier was short by $100 during the period of review.
2. Like most other theatres, Tonys Tri-Plex has a lobby with a refreshment stand just inside the front door. Most of the stands attendants are young, probably of high school or college age. They seem to know many of the customers, a majority of whom were of similar ages, which was not surprising given the theatres small-town location. On several occasions the stands attendants either failed to collect cash from the customers or failed to ring up the sale on the cash register.
3. Customers entered the screening rooms by passing through a turnstile manned by an attendant who separate the ticket and placed part of it in a locked stub box. Test counts of customers entering and leaving the theatre did not reconcile either with the number of ticket sales or the stub counts. Tickets of the wrong colour, or with the wrong dates, were also found in the stub boxes.
4. Kevin Martinez can issue free passes for special promotional purposes. An unusually high number of free passes were found in the stub boxes.
5. It appears the ticket collectors have been admitting friends who are not purchasing tickets, although there was not a body count of patrons in each theatre.

Required:

You are studying accounting at a university with a wide array of technological options, so there are many suggestions you could make involving electronic surveillance and so forth. Tony is also aware of these options. His little Triplex is a project for his small south-eastern New Mexico hometown. He would like to implement an effective management control system that would address all the actual and probable problems but would not be cost-prohibitive.