User Account

All Pages

Should the company make the change

Assignment Help Managerial Accounting
Reference no: EM132965478

Fitness First commenced trading eight months ago. The company operates premises located in Dublin including a swimming pool, a gym and a fitness studio.

The company is contemplating using the fitness studio to run classes and the costs are set out below:

                                                    Circuits Class              Dance Class
Price                                                €7                                €8
Insurance                                         €12,000                     €12,000
Ancillary fees                                  €3.20 per class          €3.20 per class
Electricity, administration, etc.                 €2,536                        €2,536
Cost of Teacher                             €50 per class                €3,300 per year

Expected number of participants per class 25

REQUIREMENT:

Problem (a) For each type of class:

(i) Calculate the breakeven point in sales revenue.

(ii) If Fitness First requires a profit of €10,000 how many classes must be held?

Problem (b) The company is considering paying the circuits instructor a fixed fee of €2,600 for the year instead of a fee per class. Calculate the effect that this change will have on the breakeven point in sales revenue. Should the company make this change?

Problem (c) Outline TWO assumptions on which the Cost-Volume-Profit model is based.

Reference no: EM132965478

Questions Cloud

What is ethics programmes adopted by company : What is Ethics Programmes adopted by this company (AVILLIONBERHAD) related to Corporate Governance context? Any Example?
Explain the rationale behind the balanced scoreboard concept : Explain the rationale behind the balanced scoreboard concepts. Explain the role of responsibility accounting in achieving company objectives.
Net present value for two capital investment : What method is best suited to comparing the net present value for two capital investment projects when the cash flows vary?
Describe the company-industry and business context : Describe the company, its industry, and its business context.
Should the company make the change : Calculate the effect that this change will have on the breakeven point in sales revenue. Should the company make this change?
Explain the drug cartels in middle america : Explain the "Drug Cartels" in Middle America. From its Purpose, Existence and its role Today in Politics and the Influence over the development of the region
Reviewing and auditing completed projects : You are working as a project manager for a small IT consulting firm and have been asked to create a plan for reviewing and auditing completed projects in order
Fifth aspect of the model : Organizational performance is the fifth aspect of the model, reflect on the question, do certain leadership behaviors improve and sustain performance at the ind
Compare to david total cash flow if firm remains unlevered : David Lee Manufacturing Co. is currently all-equity financed, has an EBIT of $2 million. Compare to David total cash flow if the firm remains unlevered.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Determine the depreciation for the month

A diesel-powered tractor with a cost of $120,000. During April, the tractor was operated 150 hours. Determine the depreciation for the month

  What is the equilibrium market price in the market

Consider a market where there are 10 potential buyers. What is the equilibrium market price in this market? How many units will be bought/sold?

  Prepare for abc trading limited statement

Prepare a statement of comprehensive income for the year ended 31 March 2019.a statement of financial position as at 31 March 2019.

  Compute the cost of each model

S. Lee Enterprises produces two models of lawn tractor: SL1 and SL2.

  Provide an insight into how ethics can best

Provide an insight into how Ethics can best be incorporated in organisations and those charge with Corporate Goverance.

  By what amount the company net operating income be increased

The company can manufacture 600,000 coolers a year at a variable cost of $1,500,000. By what amount the company net operating income be increased

  Explain is short the production process of the restaurant

Explain is short the production process of the restaurant to make a burger. (You must assume and explain what kind of raw materials)

  Calculate the relevant cost of building virtual headsets

Poullus Limited, a high-tech electronics manufacturing. Calculate the relevant cost of building 200 virtual headsets which may help with the pricing decision.

  Calculate the amount of overhead to assign to Hillier job

Kovack Construction estimated its factory overhead for 2021 to be $123,250. Calculate the amount of overhead to assign to the Hillier job

  How many hours are required

Monthly fixed costs that are directly traceable to clients amount to $40,000. How many hours are required to reach $900,000 in net income after taxes

  Compute a markup percentage based on the variable costs

Kirk Co. manufactures mobile cellular equipment, Compute a markup percentage based on the variable costs concept. Round your answer to one decimal place.

  What the income under absorption costing

Planned production in units 10,000 Actual production in units 10,000 Number of units sold 9,000. What the income under absorption costing

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd