Suppose that Snap Fitness estimates that each location incurs $4,000 per month in fixed operating expenses plus $2,000 to lease equipment. A recent newspaper article describing no-frills fitness centers indicated that a Snap Fitness site might require only 300 members to break even. Using the information provided above, and your knowledge of CVP analysis, estimate the amount of variable costs. (When performing your analysis, assume that the only fixed costs are the estimated monthly operating expenses and the equipment lease.)
(b) Using the information from part (a), what would monthly sales in members and dollars have to be to achieve a target net income of $10,000 for the month?© BrainMass Inc. brainmass.com October 10, 2019, 4:37 am ad1c9bdddf
Solution is provided in a separate excel file attached.It contains the following parts.
1 Break even sales ...
The expert examines snap fitness as it estimates the fixed operating expenses.