Apps & HCT Portal Blackboard Leam Sign In C Which System Has Th Remaining Time:1

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Apps & HCT Portal Blackboard Leam Sign In C Which System Has Th Remaining Time:1 hour, 08 minutes, 30 seconds Question Completion Status: 15 points Save Asse A Dubai based Gym/Fitness company has fxed costs of 40.000 AED Imonth and a varniable costs of 20 AEDiper fitness class member. The company curently charges 100 AED for each Siness class membsr snd hs total 800 members taking classes per month. The Gym can accommodate maximum up to 1000 members The Gym wants to raise the class charge to 120 AED to cover enhanced features such as new munsic and energy drisks which wil increase the variable cost by 10 percent a Determine the break-even quantity in terms of members b. Determine the total income (revenue) fromm the break even membershp c. Determine the percentage of total capacity at the break -even point d Determine the new breakeven point ifenhanced features of 10% inched A 50000 AED "the break-even quantity in termas of members 80 000 AED c 650 members o 350 memben E80% ,50% 408 members H 500 members the total income (revenue) from the breakeren membership. the percentage of total capacity at the break-even point new breakeven point if enhanced features of 10% included

Explanation / Answer

A.

Breakeven quantity = Fixed cost/(Price per member – variable cost per member)

Breakeven quantity = 40000/(100-20) = 500 members

B.

Income (Revenue) at breakeven level = number of members* membership price = 500*100

Income (Revenue) at breakeven level = 500*100 = 50000 AED

C.

% of total capacity at the breakeven point = 500/1000 = 50%

D.

If enhanced feature is included,

Price per membership = 120 AED

Variable cost per membership = 22 AED

Breakeven quantity = 40000/(120-22)

Breakeven quantity = 408.16 or 408 members

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