Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I want all questions for answers. Could I? November 870 $870,000 WaterFun Club is a leading swimming and yoga club. The monthly income statements for

I want all questions for answers. Could I?
image text in transcribed
November 870 $870,000 WaterFun Club is a leading swimming and yoga club. The monthly income statements for the quarter ended 30 Nov 2020 for are as follows: WaterFun Club Monthly Income Statements Monthly Statement For the Quarter Ended 30 November 2020 September October Number of members 760 910 Revenue 5760.000 $910.000 Operating expenses Salaries of coaches 456,000 546,000 Salaries of general management 30.000 30.000 Equipment expense 12.600 14,100 Supplies expense 91.200 109.200 Insurance expense 85,800 97.800 Depreciation expense 11.000 11.000 Total general and administrative (686.600) (808.100) expenses Net operating income 73.400 101,900 522,000 30,000 13,700 104 400 94.600 11.000 (775,700) 94,300 1 2 Required: 1a) Identify each of the above expenses as variable, fored or mixed. (3 marks) 11) Using the high-low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense (4 marks) 1c) Calculate the breakeven number of members the club has to serve per month Assume that each member is charged a membership foes of $1,000 per month (7 marks) 1d) Assuming the company has targeted for a profit of $150,000 for the coming month. What is the margin of safety in dollar value the company achieved its targeted profit. (4 marks) 1e) For 2021, Management is proposing to expand to Malaysia. As a trial for the initial expansion, WaterFun will incur additional monthly foxed expense of $60,000. Variable costs per customer is expected to increase by $90 Membership fee per customer remains unchanged How many customer memberships must sign up in Malaysia ir WaterFun wants to maintain its current profit level as a whole assuming that all other revenue and costs remain unchanged (4 marks) 11) Using the answers in c) and d), explain the significance of breakeven analysis and margin of safety to management. Provide two solutions for what WaterFun can do, to reduce its breakeven point (4 marks) 19) Explain how would an understanding of cost behaviour help the managers in

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Connect For Financial Accounting Fundamentals

Authors: Author

8th Edition

126411169X, 9781264111695

More Books

Students also viewed these Accounting questions

Question

With reference to Exercise 3.65, find P(X + Y Answered: 1 week ago

Answered: 1 week ago