City Racquetball Club

City Racquetball Club (CRC) generates revenue by offering racquetball and other physical fitness facilities to it members. Presently, there are four of these club located in the metropolitan area and each club have approximately 1,800 to 2,500 members. The current revenue is collected from annual membership and hourly court fees. The annual membership fees are charged at three different classes of membership – Individual, Student and Family at $40, $25 and $95 respectively. The breakdown of the membership for the clubs at 31 December 2012 is as follows:

Individual 1,100

Student 100

Family 700

On top the annual membership fees, members will pay for court usage vary from $6 to $10 subjected to the season and the availability of the courts. During the peak hours, members will be charge at a higher rate.

The peak racquetball season is considered to run from September through April. During this period, the court usage averages 90 to 100 percent of capacity during peak hour which is 5:00pm – 9:00pm and 50 to 60 percent of capacity during the remaining hours and the daily average court usage during off season to be only 20 to 40 percent of capacity.

Records from the previous year had shown that a substantial amount of cash receipts were collected during the earlier part of the racquetball season when most memberships were expired and renewed. The other factor for higher cash receipts was due to heavier court usage during the peak racquetball season. However, the cash receipt are not as large in non-peak season such as spring and caused a significantly drop in the summer months.

CRC is considering changing its membership and fee structure in an attempt to change its cash receipts. The proposed new membership plan will change the flow of CRC's cash receipts by charging a higher one time annual membership fees and eliminates annual payment and hourly court usage fee. There will be two classes of membership as follow:

Individual $250

Family $400

CRC will be collecting the annual fees in advance