1) Identify the key factors that Brisbane Badminton Club should consider when evaluating and budgeting for this proposed membership price. 

 (2) How will the club’s new membership plan and pricing structure improve its ability to plan its revenues and costs? Explain your answer. 

 (3) Estimate the impact on sales revenue and operating profit of a planned change in the membership fee structure for the upcoming membership year (October 2023 to September 2024) and compare it to the financial statements for the current year (October 2022 to September 2023).

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Brisbane Badminton Club Brisbane Badminton Club offers airconditioned badminton court facilities to its members. The club has been operating at prime location in Brisbane since 1985. The club has 2,000 members. Revenue is generated from annual membership fees and hourly court usage fees. The current membership composition and current annual membership fees are as follows: Membership category % of total members Annual membership fees ($) Individual $50 Student Family 25% 25% 50% $30 $100 The hourly court usage fees are $22 at the prime time of the day and $12 at other times during the peak season. There are 10 court rooms at the club. The club operates 362 days per year and the club's daily operating hours are 6 am to 12 noon and 2 pm to 8 pm. The peak season runs from October to April (181 days). During peak season, court usage averages from 90% to 100% of capacity during prime time (6 am to 8 am in the morning and 6 pm to 8 pm in the evening). The court usage during remaining hours of the day during peak season ranges between 50% to 60% of capacity. Daily court usage during the off-season averages from 40 to 50% of the capacity, and is charged at a flat fee of $16 per hour. The club's memberships expire at the end of September each year. A substantial amount of revenue is collected during early part of peak season due to the renewal of annual membership fees and heavy facilities usage. However, revenue collection during off-season drops significantly due to reduced facilities usage. The club had signed a long-term lease 10 years ago for the space of its facilities which would expire in September 2023. The management of the club knew that the lease payments would be substantially higher as per the new lease contract commencing October 2023. To ensure that the club's operations are profitable and to improve the cash flow planning of the club in the context of higher operating expenses, the club is considering some major changes to its revenue stream. For the start of the new membership year commencing October 2023, Brisbane Badminton Club is considering introducing a new membership and fees structure. Under the new membership plan, only an annual membership fee would be charged, rather than a membership fee plus hourly facilities usage fees. The predicted membership composition and planned annual membership fees for the upcoming membership year is as follows: Membership category % of total members Annual membership fees (5) Individual membership $1,200 Student membership $1,080 $2,400 Family membership 25% 25% 50% The annual membership fees would be collected in advance at the time of member enrolments. Members would be allowed to use the club facilities as often as they wished Brisbane Badminton Club Brisbane Badminton Club offers airconditioned badminton court facilities to its members. The club has been operating at prime location in Brisbane since 1985. The club has 2,000 members. Revenue is generated from annual membership fees and hourly court usage fees. The current membership composition and current annual membership fees are as follows: Membership category % of total members Annual membership fees ($) Individual $50 Student Family 25% 25% 50% $30 $100 The hourly court usage fees are $22 at the prime time of the day and $12 at other times during the peak season. There are 10 court rooms at the club. The club operates 362 days per year and the club's daily operating hours are 6 am to 12 noon and 2 pm to 8 pm. The peak season runs from October to April (181 days). During peak season, court usage averages from 90% to 100% of capacity during prime time (6 am to 8 am in the morning and 6 pm to 8 pm in the evening). The court usage during remaining hours of the day during peak season ranges between 50% to 60% of capacity. Daily court usage during the off-season averages from 40 to 50% of the capacity, and is charged at a flat fee of $16 per hour. The club's memberships expire at the end of September each year. A substantial amount of revenue is collected during early part of peak season due to the renewal of annual membership fees and heavy facilities usage. However, revenue collection during off-season drops significantly due to reduced facilities usage. The club had signed a long-term lease 10 years ago for the space of its facilities which would expire in September 2023. The management of the club knew that the lease payments would be substantially higher as per the new lease contract commencing October 2023. To ensure that the club's operations are profitable and to improve the cash flow planning of the club in the context of higher operating expenses, the club is considering some major changes to its revenue stream. For the start of the new membership year commencing October 2023, Brisbane Badminton Club is considering introducing a new membership and fees structure. Under the new membership plan, only an annual membership fee would be charged, rather than a membership fee plus hourly facilities usage fees. The predicted membership composition and planned annual membership fees for the upcoming membership year is as follows: Membership category % of total members Annual membership fees (5) Individual membership $1,200 Student membership $1,080 $2,400 Family membership 25% 25% 50% The annual membership fees would be collected in advance at the time of member enrolments. Members would be allowed to use the club facilities as often as they wished

Answer rating: 100% (QA)

1 Key factors to consider when evaluating and budgeting the proposed membership pricing for Brisbane Badminton Club a Membership Composition The club should carefully analyze the membership compositio... View the full answer