For Q2, is there anything else regarded as fixed cost other than the Monthly Rent, Utility, Manager Wage, Staff Wage ?

I've calculated the contribution margin to be 747.6 per member per year, and the yearly fixed costs to be $150,337.50 per year

Hence the break even number of gym member per year would be = 201.09

Is this correct ?

Dollars and Sense [BUSIAFB] Individual Assignment Semester 2 2019 CASE STUDY 1 FACT SEI' John Peterson is considering investing in a new gym franchise business. John has hired you to estimate the financial viability of the business. To do this, you intend to conduct a Net Present Value (NPV) analysis with the following set of available data. TASKS The membership fees are set at a flat rate of $70 per month. You estimate that the gym will have approximately 250 members in the first year, 300 in the second year and 500 in the third yeah Under the franchise agreement, John will have to pay a royalty payment equal to 7% of sales. He will also have to contribute 4% of sales towards the marketing costs of the franchisor. Monthly rental estimate is $3500. Utility estimate is $1,500 per month. John needs to employ a full-time manager and two (2) casuals to look after the gym during the week. No staff are needed during the weekends. The manager's wage is estimated to be $50,000 per annum plus 9.5% superannuation. The total hours for two {2) casuals are approximately 25 hours per week at a rate of $25 per hour plus 9.5% superannuation. The gym equipment costs $120,000 and is expected to depreciate over a six-year useful life on a straight-line basis. Besides the cost of the equipment, John also incurs other initial investments such as initial franchise fee, grand opening, etc. which totals to $200,000. John finances the franchise using his own savings. You estimate the cost of capital to be 16%. Assume John incurs a tax rate of 30% and assume no inflation in prices or wages. What is the contribution margin per member per year? (6 mark) Contribution margin per member per year = Selling price for 12 months for each member Variable costs for 12 months for each member. CaICulate the yearly xed costs that John will incur. (10 marks) Calculate the break-even number of gym members per year. (4 marks)