04-11-2010, 07:57 PM

Hi....

I am not able to solve this complex question.

Health and Racket bought a squash centre, consisting of 12 courts at a price od R 1,800,000. The acquisition was financed by means of a loan, which is repayable, annually in arrears, in installments of R100,000 capital, plus interest at 16% p.a on the outstanding capital. To date, one payment has been made.

The budgeted operating costs of the centre for the next financial year are as follows

Salaries R 96,000

Wages(fixed) 18,216

Electricity and water(fixed) 33,600

Repairs and maintenance at 80% capacity utilization 30,624

Repairs and maintenance at 60% capacity utilization 25,368

Electricity -per hour per court per hour played R1.20

Squash courts will be let out at R8 per 30 minutes.

The squash centre will be open from 06h00 to 21h00 everyday for the year.

<b>Required</b>

1. Determine the maximum number of games that can be played per annum.

2. Determine the fixed and variable elements of repairs and maintenance costs.

3. Calculate the marginal income per game.

4. Determine the number of games that must be played during the next financial year for the company to earn a profit of R48,000.

5. Determine the capacity utilization in (question 4) above.

Please help!!!

I am not able to solve this complex question.

Health and Racket bought a squash centre, consisting of 12 courts at a price od R 1,800,000. The acquisition was financed by means of a loan, which is repayable, annually in arrears, in installments of R100,000 capital, plus interest at 16% p.a on the outstanding capital. To date, one payment has been made.

The budgeted operating costs of the centre for the next financial year are as follows

Salaries R 96,000

Wages(fixed) 18,216

Electricity and water(fixed) 33,600

Repairs and maintenance at 80% capacity utilization 30,624

Repairs and maintenance at 60% capacity utilization 25,368

Electricity -per hour per court per hour played R1.20

Squash courts will be let out at R8 per 30 minutes.

The squash centre will be open from 06h00 to 21h00 everyday for the year.

<b>Required</b>

1. Determine the maximum number of games that can be played per annum.

2. Determine the fixed and variable elements of repairs and maintenance costs.

3. Calculate the marginal income per game.

4. Determine the number of games that must be played during the next financial year for the company to earn a profit of R48,000.

5. Determine the capacity utilization in (question 4) above.

Please help!!!