Acc 561 Cvp and Break Even Analysis

CVP and Breakeven Analysis

Professor Jimenez
June 11, 2012
CVP and Breakeven Analysis


      When you invest in an already created business model, you can have confidence the business will be successful if you work hard and follow the franchisors instructions. Franchised businesses typically have a proven track record of success, and can support nationwide expansion. The same opportunities are the reason why the Snap Fitness business model is attractive, especially if you dream of owning your own franchise business that is already a recognizable brand in the health and fitness industry.   This paper will discuss the estimated amount of variable costs for Snap Fitness, along with explaining how to achieve the target income successfully based on calculations, take a look at what the five standard types of variable costs are for fitness centers, and lastly, deciding whether to invest in a franchise opportunity like Snap fitness based on research from other fitness centers.

Achieving the Net Income

Five Examples of Variables Costs for a Fitness Center

      Whether it is a small or large fitness center there will be costs associated with running the business.   The owner or management of Snap Fitness is responsible for these costs.   Variable costs are costs that vary in total directly and proportionately with changes in the activity level, or they are costs that remain the same per unit at every level of activity (Kimmel, Weygandt, Kieso, 2009).   For Snap Fitness there are variable costs that are associated with running this facility.   The first variable cost is supplies.   These are directly linked to employees and number of clients within the facility.   The more employees and clients, the more supplies will be needed.   This can be controlled if the employees try to use the supplies wisely and not waste what could be saved.   Towels, shampoo, and soap are examples of supplies that will fluctuate, depending on the number of...