Leo’s Four-Plex Theater Case
Characteristic of the business
The characteristic of Leo’s Four-Plex Theater is entertainment services business, specifically movie theater business. Current situation of the business
The Four-Plex Theater is a single located four-screen movie theater located in small town in west Texas, and reported as not profitable as expected by the owner with suspicion due to the control problem in the theater operation. That’s why the owner hires an accounting professor for observation and suggestion. Focus on problem
Summary of problems:
The theater has two ticket booths selling the tickets for the movies. 2.
The seating for each movie is not assigned.
The tickets were colored differently for each movie and good for day of sale only. 4.
They count the daily ticket sales for each movie by subtracting the number of the first ticket sold from the ending number at each price for. 5.
The amounts of cash collected were counted daily and compared with total value of tickets sold. Most of the time, the cash are less from what it should have been. 6.
In the lobby there is a refreshment stand, attended by youngsters mostly, and sometimes the stand’s attendants failed to collect cash from the customers or ring up the sale on the cash register. 7.
The test counts of customers entering and leaving the theater did not reconcile either with the number of ticket sales or the stub counts. Two specific problems:
There are few tickets of the wrong color or with the wrong dates in the ticket stub boxes. B.
Sometimes there are significant numbers of free theater passes with Bill Reilly’s signature on them. Analysis of problem
There is no problem for this matter.
There is no significant problem for this matter as well, except for unorganized seating. 3.
This is a valid operating procedure; however the attendant of the screening rooms has to check carefully for every ticket submitted. 4.
It’s a valid ticket sales counting method. No...
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