Question: Visit a local movie theater and check out both its concession area and its showing areas. The manager of a theater must confront questions such as:
? How much return do we earn on concessions?
? What types of movies generate the greatest sales?
? What types of movies generate the greatest net income?
Required: Assume that you are the new accounting manager for a 16-screen movie theater. You are to set up a responsibility accounting reporting framework for the theater.
1. Recommend how to segment the different departments of a movie theater for responsibility reporting.
2. Propose an expense allocation system for heat, rent, insurance, and maintenance costs of the theater.