ACCTG 561 – Week 5 LT Assignment
This assignment is about CVP and break-even analysis. Your team should assume the role of prospective franchisees. Complete the BYP 19-7, below. Then write a paper using the outline below.
BYP19-7 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 to take advantage of state-of-the-art fitness equipment but do not need the other amenities of full-service health clubs. One way to own your own fitness business is to buy a franchise. Snap Fitness is a Minnesota-based business that offers franchise opportunities. For a very low monthly fee ($26, without an annual contract) customers can access a Snap Fitness center 24 hours a day.
The Snap Fitness website (www.snapfitness.com) indicates that start-up costs range from $60,000 to $184,000. You can find updated amounts on the website for Snap Fitness. This initial investment covers the following pre-opening costs: franchise fee, grand opening marketing, leasehold improvements, utility/rent deposits, and training.
(a) 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 per member. (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?
(c) Provide five examples of variable costs for a fitness center.
(d) Go to the website for Snap Fitness, and find information about purchasing a franchise. Summarize the franchise information needed to decide whether entering into a franchise agreement would be a good idea.
Here is an outline you can follow for your team paper.
I. Introduction. Your paper is about a franchise opportunity that you are considering. Talk about the company you are looking at, Snap Fitness. Briefly introduce the company, giving the company’s history, organizational structure. Then explain that the company grows and expands using franchising opportunities.
II. Discuss how franchising works, from the perspective of the franchisor (Snap Fitness) and the franchisee (your team). Discuss the pros and cons of franchising. Based on a Google search of complaints about the Snap Fitness franchise opportunities, comment on the concerns you have, if you have any.
III. Present the financial information you have obtained, and perform your CVP analysis. Here would be a good point at which you show what variable cost per member is (you must calculate).
IV. Tell what you think about this opportunity. Based on the preceding parts of your paper, provide a recommendation. Would your team accept this opportunity or reject it. Explain your decision.
The paper should be between 1500 and 1800 w
At 111papers.com, we value all our customers, and for that, always strive to ensure that we deliver the best top-quality content that we can. All the processes, from writing, formatting, editing, and submission is 100% original and detail-oriented. With us, you are, therefore, always guaranteed quality work by certified and experienced writing professionals. We take pride in the university homework help services that we provide our customers.
As the best homework help service in the world, 111 Papers ensures that all customers are completely satisfied with the finished product before disbursing payment. You are not obligated to pay for the final product if you aren’t 100% satisfied with the paper. We also provide a money-back guarantee if you don’t feel that your paper was written to your satisfaction. This guarantee is totally transparent and follows all the terms and conditions set by the company.Read more
All products that we deliver are guaranteed to be 100% original. We check for unoriginality on all orders delivered by our writers using the most advanced anti-plagiarism programs in the market. We, therefore, guarantee that all products that we submit to you are 100% original. We have a zero-tolerance policy for copied content. Thanks to our strict no plagiarized work rule, you can submit your homework to your professor without worrying.Read more
TThis is one of the most cherished courtesy services that we provide to help ensure that our customers are completely satisfied with our finished products. Delivering the best final product to our customers takes multiple inputs. 111papers.com prides itself on delivering the best university homework help services in the writing industry. And, in part, our free revision policy is how we do it. What’s more, all our revisions are 100% free without any strings attached.Read more
Client privacy is important to use. We know and understand just how important customers value their privacy and always want to safeguard their personal information. Thus, all the information that you share with us will always remain in safe custody. We will never disclose your personal information to any third party or sell your details to anyone. 111 Papers uses the most sophisticated, top-of-the-line security programs to ensure that our customers’ information is safe and secured.Read more
Placing your order with us means that you agree with the homework help service we provide. We, in turn, will endear to ensure that we do everything we can to deliver the most comprehensive finished product as per your requirements. We will also count on your cooperation to help us deliver on this mandate. Yes, we also need you to ensure that you have the highest-quality paper.Read more