Reference no: EM13178214

CRC offers racqueball and other physical fitness facilities to its mbrs. There are 4 of these clubs in the metro area. each club has between 1800 to 250 mbs. revenue is derived from annual mbrship fees and hourly curt fees. The annual mbrships fee: individual $40.00; student 25, and family 95. The hourly court fee vary from $6 to 10 depending upon the season and the time of day (prime vs. nonprime time).The peak racqu. season is considered to run from sept to april. during this period, court usage averages 90 to 100% of capacity during prime time 5-9pm & 50% capacity during the remaining hours Daily court usage during the the off season ie summer average 20-40% of capacity.most of crc mbr have sept. expiration. A sustantial amount of the cash receipts are collected during the early part of the racq. season due to the renewal of the annual mbrship fee and heavy curt usage. However cash receipts are nt as large in spring and drop sig. in the summer months.CRC is considering change it s mbrship & fee structure in an attept to change it cash reciept. under the new mbrship plan., only an annual mbrship fee would be charged, rather than a mbrship fee plus hourly court fee. There would be 2 classes of mbrship: indiv. $250 and family 400The annual fee would collected in adv. at the time the mbrship application is completed mbr would be allowed to use the raquetball courts as often as they wish during the yr under the new plan.

All future mbrship would be sold under these new terms. current mbrship would be honored on the old basis until they expire However aspecialpromotioncampaignwould be institute toattractnew mbr and to encourage current mbrs to convert to new mbrship plan immediately.

The annual fee for indiv. family mbrship would reduced $200 and $300 respectedly during the two month promotion campaing. in additon all mbrship sold and renewed during this period would be for 15 mos rather than the normal one year period. current mbrs also would be given a credit toward the annal fee for the unexpired portion of their mbrship fee and for all prepaid hourly court fee for league play that have not yet been used.

CRC management estimate that 60 to 70% of the present mbrship would continue w. the club. The most active mbr (45%of the present mbrship) would convert immediately to the new plan. while the remaining mbr who continue would wait until their current mbrship expire. Those mbrs who would not continue are not consider active (ie they play five or less time during the year) management estimates that the losss of mbr would be offset full by new members within 6 months ofinstitutingthe new plan. Furthermore, many of the new mbrs would be individuals who would play during nonprime time. management estimates that adequate courtime will be available for all member under the new plan.If the mbrship plan is adopted, it would be instituted on Feb. 1, well before the summer season. The special promotionalcampaignwould be conducted during March and April. once the plan implemented. annual renewal mbrship and payment of fees would take place as each indiv. or family membership expired.

Develop a Schedule 1 budget and a Schedule 7 budget based on the new membership plan and fee structure. Will CRC's new membership plan and fee structure improve its ability to plan its cash receipts? Why or why not?