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1.	On June 3, Melvin screened The Descendants. The film grossed $5,940. The guarantee to the distributor was $460, 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 $1,400.
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?

Mandy Melvin is the manager of Ashford's traditional Sunday Flicks, sponsored by the Ashford Student Association. The admission price is deliberately set at a very low $2. Each Sunday, a film has two showings and a maximum of 1,600 tickets can be sold for each showing. The rental of the auditorium is $380 and labor is $435, including $50 for Melvin. Melvin must pay the film distributor a guarantee, ranging from $260 to $850, 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, Melvin screened The Descendants. The film grossed $5,940. The guarantee to the distributor was $460, or 40% of gross admission receipts, whichever is higher. What operating income was produced for the Student Association? Film Refreshments Total Revenues from admissions Variable costs Contribution margin Fixed costs: Auditorium rental Labor II Operating income

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