3. Starting a Brazilian Ju Jitsu (BJJ) studio Lisa has practiced BJJ over the past 2 years and although she is only a blue belt, she thinks she knows enough to turn her hobby into a business. While James is supportive of the idea, he has very limited BJJ knowledge and experience and does not share her enthusiasm for the sport. Lisa did some market research and estimated the monthly revenue and costs for a BJJ studio (Exhibit IV). She was wondering if you could calculate how many memberships and years the studio would need to break-even on the first year's startup costs.

Here are our estimated monthly costs and revenues for the BJJ studio: # of BJJ student memberships Membership fee/month Total Monthly Revenue Wages for Trainers Rent Insurance Total Fixed Expenses Revenue 150 $125 $18,750 Fixed Expenses $500 $2,170 $70 $6,540 Variable Expenses (Per Membership) Electricity and other Utilities Equipment maintenance $32 $9 Marketing and selling $18 Miscellaneous $10 Total Variable Expenses $69