Question

Gibson Cinemas is considering a contract to rent a movie for $2,200 per day. The contract requires a minimum one-week rental period. Estimated attendance is as follows: Monday Tuesday Wednesday Thursday Friday Saturday Sunday 420 340 190 570 1,030 1,030 490 Required Determine the average cost per person of the movie rental contract separately for each day. Suppose that Gibson chooses to price movie tickets at cost as computed in Requirement a plus $2.00. What price would it charge per ticket on each day of the week

Answer 1

Answer:

$5.78

Explanation:

Reasonable price = [(Contract cost per day*Number of days) / (Total tickets sold)] + Profit

Reasonable price = [$2,200 * 7 / (420+340+190+570+1,030+1,030+490)] + $2

Reasonable price = [$15,400/4070} + $2

Reasonable price = $3.7838 + $2

Reasonable price = $5.7838

Reasonable price = $5.78