Max Cinemas has three types of seats – Classic, Prime & Recliner where the total capacity is 306 seats, which are divided in the ratio of 12:4:1…

CA Intermediate · Cost and Management Accounting · PYQS · May 2025
Max Cinemas has three types of seats – Classic, Prime & Recliner where the total capacity is 306 seats, which are divided in the ratio of 12:4:1 respectively. The ticket price of Prime is twice of Classic ticket price and that of Recliner is thrice of Prime ticket price. Following information is given: Types of seats Occupancy percentage Classic 75% Prime 50% Recliner 50% On a daily basis, 4 movie shows are run throughout the year. The total cost per day is estimated to be - 77,760. Assume 25% profit on total revenue. Required: (i) Calculate Equivalent Classic seats per day. (ii) Calculate Ticket prices of all three types of seats.

Suggested Answer and Working Notes:

(i) Total Equivalent Classic seats per day: Type of Seats Occupied seats per day Equivalent Classic seats per day Classic 648 (216 seats x 75% x 4 shows) 648 (648 × 1) Prime 144 (72 seats x 50% x 4 shows) 288 (144 x 2) Recliner 36 (18 seats x 50% x 4 shows) 216 (36 × 6) 1,152 (ii) Calculation of Ticket Prices for all types of seats: Total cost per day = 77,760 Profit is 25% on total revenue ∴ Total Revenue = 77,760 / 75 x 100 = 1,03,680 Calculation of Ticket Price for Classic seat per show: Total Revenue / Equivalent Classic Seats per day = 1,03,680 / 1,152 = 90 Ticket Prices for all three types of seats: Ticket price per show for Classic Seat = 90 Ticket price per show for Prime Seat = 90 x 2 = 180 Ticket price per show for Recliner Seat = 90 x 6 = 540

Topics: Service Costing

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