Loading...

Messages

Proposals

Stuck in your homework and missing deadline? Get urgent help in $10/Page with 24 hours deadline

Get Urgent Writing Help In Your Essays, Assignments, Homeworks, Dissertation, Thesis Or Coursework & Achieve A+ Grades.

Privacy Guaranteed - 100% Plagiarism Free Writing - Free Turnitin Report - Professional And Experienced Writers - 24/7 Online Support

What are some variable costs for a fitness center

01/01/2021 Client: saad24vbs Deadline: 14 Days

I have already completed Section1, 2 and I need help with Section 3, 4


Section 1: Suppose that Snap Fitness estimates that each location incurs $5,000 per month in general fixed operating expenses and $1,000 to lease equipment. Mixed costs are equal to $500 per/month (fixed) plus $1 per membership sale (variable). Total variable costs were not provided. A recent newspaper article describing no-frills fitness centers indicated that a Snap Fitness site might require only 320 members to break even. Members pay on a monthly basis. Using the information provided above, and your knowledge of CVP analysis, estimate the amount of variable costs. (When performing your analysis, assume that fixed costs include estimated monthly operating expenses, equipment lease and the fixed part of mixed costs.)


Section 2: Using the information from part 1, section 1, what would monthly sales in members and dollars have to be to achieve a target net income of $15,000 for the month?


Section 3: Provide several examples of variable costs and fixed costs for a fitness center. Discuss how a fitness center's cost structure, relevant range, margin of safety, cost behaviors, and CVP apply to the case study. How do you plan to use this in order to manage the business and plan for profitability? What type of internal accounting reports would you like to review in order to help you make informed decisions?


Section 4: Go to a competitor's internet site (Curves, Snap Fitness, or Anytime Fitness ) and find information about purchasing their franchise. Summarize the pertinent information required to make an informed investment decision. Which franchise do you believe is a better business opportunity? Explain your answer.


My Answer


Snap Fitness is a company that offers franchise opportunities that capitalize on the needs of consumers to provide an equipped and convenient place to exercise while saving them money and time by offering the option to add desired or remove undesired services. Within this paper, the prospect of operating and purchasing Snap Fitness will be considered by evaluating contribution margin income statements. Break-even analyses and cost-volume-profit (CVP) and the variable costs affiliated with a fitness center’s operation will be evaluated. Lastly, this paper will determine if the venture to open a Snap Fitness would be profitable and what steps should be taken to open a Snap Fitness franchise.


Section 1: Suppose that Snap Fitness estimates that each location incurs $5,000 per month in general fixed operating expenses and $1,000 to lease equipment. Mixed costs are equal to $500 per/month (fixed) plus $1 per membership sale (variable). Total variable costs were not provided. A recent newspaper article describing no-frills fitness centers indicated that a Snap Fitness site might require only 320 members to break even. Members pay on a monthly basis. Using the information provided above, and your knowledge of CVP analysis, estimate the amount of variable costs. (When performing your analysis, assume that fixed costs include estimated monthly operating expenses, equipment lease and the fixed part of mixed costs.)


[Cost volume profit analysis (CVP analysis) is one of the most powerful tools that managers have at their command. It helps them understand the interrelationships between cost, volume, and profit in an organization by focusing on interactions among the following five elements: (1) Prices of products (2) Volume or level of activity (3) Per unit variable cost (4) Total fixed cost (5) Mix of product sold.] (Accounting Management, 2012; Accounting Management, 2012)


Snap Fitness estimates that each location incurs $5,000 per month In fixed operating expenses plus $1,000 to lease equipment, $500 per month fixed and $1 per membership (variable)


Fixed cost = 5000+1000+500 = $6500


Using the equation


Sales = variable cost + fixed cost


Breakeven occurs at 320 membership


320*27 = variable cost + 6500


Variable cost = 8640-6500 = 2140


Variable cost per member = 2140/320 = $6.69 (this includes $1 per membership sale)


The variable costs that Snap Fitness faces can be controlled by monitoring the variable


expenses that Snap incurs each month. If Snap’s operating, expenses consist of a building lease,


electricity, water, and employees to run the operation. You can lower this cost by either lowering


the rent on the building, find more cost efficient ways to provide electricity to power the


equipment, or lowering the amount of employees you have on staff. You could also lower the


variable costs for the company by finding a cheaper vendor to lease your equipment. [Because


cost-volume-profit (CVP) analysis helps, managers understand the relationship among cost,


volume and profit it is a vital tool in many business decisions. These decisions include, for


example what products to manufacture or sell, what pricing policy to follow, what marketing


strategy to employ, and what type of productive facilities to acquire.] (Accounting Management,


2012) By using CVP analysis Snap Fitness will be able to set their price for membership,


determine the amount of employees they can afford to employ, and determine their breakeven


membership level for the month and year.


Section 2: Using the information from part 1, section 1, what would monthly sales in members and dollars have to be to achieve a target net income of $15,000 for the month?


For a profit of $15,000


Revenue – cost = profit


Revenue = 27x


Cost = 6.69x+6500


27x-6.69x-6500 = 15000


20.31x = 21500


X = 1058.59 or 1059 members


If $15,000 is the amount the franchise aims to meet as its monthly net income target, there would need to be a membership count of 1059 at $27 per membership. This would add up to a total income amount of $28,593. With the variable totals of $7084 (6.69 per unit and fixed costs of $6500, the desired net income of $15,009 is reached.

Homework is Completed By:

Writer Writer Name Amount Client Comments & Rating
Instant Homework Helper

ONLINE

Instant Homework Helper

$36

She helped me in last minute in a very reasonable price. She is a lifesaver, I got A+ grade in my homework, I will surely hire her again for my next assignments, Thumbs Up!

Order & Get This Solution Within 3 Hours in $25/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 3 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 6 Hours in $20/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 6 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

Order & Get This Solution Within 12 Hours in $15/Page

Custom Original Solution And Get A+ Grades

  • 100% Plagiarism Free
  • Proper APA/MLA/Harvard Referencing
  • Delivery in 12 Hours After Placing Order
  • Free Turnitin Report
  • Unlimited Revisions
  • Privacy Guaranteed

6 writers have sent their proposals to do this homework:

Helping Hand
Top Essay Tutor
University Coursework Help
Writer Writer Name Offer Chat
Helping Hand

ONLINE

Helping Hand

I am an Academic writer with 10 years of experience. As an Academic writer, my aim is to generate unique content without Plagiarism as per the client’s requirements.

$100 Chat With Writer
Top Essay Tutor

ONLINE

Top Essay Tutor

I have more than 12 years of experience in managing online classes, exams, and quizzes on different websites like; Connect, McGraw-Hill, and Blackboard. I always provide a guarantee to my clients for their grades.

$105 Chat With Writer
University Coursework Help

ONLINE

University Coursework Help

Hi dear, I am ready to do your homework in a reasonable price.

$102 Chat With Writer

Let our expert academic writers to help you in achieving a+ grades in your homework, assignment, quiz or exam.

Similar Homework Questions

Canadian writer's handbook essentials edition pdf - Big red combine harvester chords - Ambassador john w mcdonald - Single index model vs markowitz - Change impact assessment tool - Discussion question - Find the indicated probability round to the nearest thousandth - Markel m 2015 technical communication 11th ed - Vortex company operates a retail store with two departments - The crucible movie characters - Lintel span table australia - System analysis and design final project - Weekly Insight #2 - Walt disney world swot analysis - When i heard the learn'd astronomer meaning - Middle range nursing theory leadership - Voltage divider rule parallel - Chcleg001 learner guide - QUALITATIVE Journal Submit Article Reviews Here - James hardie 2700 x 600 x 19mm secura exterior flooring - What are the main branches of christianity - Cloud_computing_1 - English Composition I ASSIGNMENT (1) - Healthiertogether medtronic com - Xray vision led light bar - Assignment #012 - How to calculate outright quotes for bid and ask - Week 2 discussion Business - Option for the poor and vulnerable - Isobutane condensed structural formula - Acap master of social work qualifying - Creating Company E-mail and WIFI / Internet Use Policies Attached you will find a description of your final project assignment. - Ps2100 week 4 assignment worksheet - What is fatuous love - Learning about aboriginal symbols - Baking soda and vinegar limiting reactant lab answers - Explicit costs of an ipo tend to be around ______ of the funds raised. - Focus on english 7 teacher book pdf - Suppose the following bond quote for iou corporation - Convention on biological diversity australia - Discussion - What does oedipus promise to do - Forecasting interview questions - Levers in the body - Physics classroom mass and weight - Learn animal body parts - Research Paper - Hostel management system dbms project - York st john university moodle - Audience analysis memo sample - Wave on a string worksheet answers - Questionare - Begotten andrew hudgins text - The norton introduction to philosophy 2nd edition - Journalize the transactions including explanations - Straight outta compton scattering - So you ve been publicly shamed sparknotes - Color of the stars from hottest to coldest - Strategic plan: implementation plan, strategic controls, and contingency plan analysis - Jeld wen builders vinyl - The carrying value of bonds payable equals - A porsche accelerates from a stop light - 1 4 9 16 and 25 are all triangular numbers - Order 2272263: Using William Faulkner’s “Barn Burning” as the source to cite, write a five-paragraph essay in response to: Sarty Snopes, at the beginning of the story, accepts his father’s (Abner’s) enemies as his enemies (linking them together), but by t - Criminology in canada theories patterns and typologies 6th edition pdf - What is a monologue - Cpcccm1015a carry out measurements and calculations - Answer questions - Leadership and conflict management ppt - Bran nue dae teaching resources - I am looking for someone to complete my International Organizational Behavor - Managing integrated marketing communication process - Gray code to binary converter circuit - Uva ltac - The six simple principles of viral marketing - Dr navin g haider - Discussion lab report biology food test - Todaiji temple ap art history - What is the numerical value of avogadro's number - Gbmc internal medicine residency - Journal article critique example apa 6th edition - Chapter 2 summary of lord of the flies - Ramona pierson net worth - Angry men logical fallacies examples - Website redesign project plan - Bond j has a coupon rate of 4 percent - Nova making stuff stronger navy airlines worksheet answers - Audi q5 2021 brochure - Db 3 - Amarok multi attachment point - Mariana nos que iba a venir pronto. - Assessment week 2 - Anti static bag post office - Flipkart ebay merger case study - What are multivariate tests in spss - Ip xact register definition - 4 characteristics of all living things - How to fold a napkin nicely - What is hppd in nursing - South east wales centre for teacher education and training