Reference no: EM131729391
To make use of idle space (15%) a fitness company is considering opening a yoga studio in that space. I am to determine what the profit would be for the company based on expected enrollment. And also what is the average enrollment level for a 10 week session to be able to produce an annual net profit of 25,000.
Data Given:
Classes offered over a 10 week period, these 10 sessions offered continuosly throughout year (5 consecutive sessions per year)
Classes for each session 6 time slots per week (so 60 classes over a 10 week session)
Expected enrollment for the 6 time slots is 122
Class cost 130 for 10 week session
Expenses:
Instructor salary 125/per class
Insurance due to risk $1000 for each 10 wk session
Fixed overhead costs of $1500 have been allocated to each 10 week session
Other incremental costs for 10 week session : heat $2000
Annual advertising $15,000
Free outfit with each enrollment $28
Monthly lease 5000 for entire location