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Many of you will some day own your own business. One rapidly growing opportunity is no - frills workout centers.Such centers attract customers who want
Many of you will some day own your own business. One rapidly growing opportunity is nofrills workout centers.Such centers attract customers who want to take advantage of stateoftheart fitness equipment but do not need the other amenities of fullservice health clubs. One way to own your own fitness business is to buy a franchise.Snap Fitness is a Minnesotabased business that offers franchise opportunities. For a very low monthly fee $ without an annual contract customers can access a Snap Fitness center hours a day.The Snap Fitness website wwwsnapfitness.com indicates that startup costs range from $ to $This initial investment covers the following preopening costs: franchise fee, grand opening marketing, leasehold improvements, utilityrent deposits, and training.Suppose that Snap Fitness estimates that each location incurs $ per month in fixed operating expenses plus $ to lease equipment. A recent newspaper article describing nofrills fitness centers indicated that a Snap Fitness site might require only 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.Variable costs in total:$Using the information from previous part, what would monthly sales in members and dollars have to be to achieve a target net income of $ for the month?Find the:Required sales in units Required sales in dollars
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