Anthony Herrera recently fulfilled his long-time dream of opening a gym that off

Question

Anthony Herrera recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $5.50 per person. To differentiate his gym and better serve his clients, Anthony provides a towel, a bottle of water, and an after-workout protein shake to each person participating in a class, at a cost of $2.56 per person. Anthony employs three part-time instructors and pays them each $1,290 per month. He also pays himself a monthly salary of $4,392. Anthony’s other monthly costs are $1,638 for rent, $1,310 for depreciation on his 30 bikes, and $1,928 in utilities and insurance.

Prepare Anthony’s monthly contribution format income statement assuming he teaches 5,204 clients.

Explanation / Answer

Income statement of Anthony for the month:-

A) Fee Receipts (5,204 x $5.5) $28,622.00

B) Variable Costs (5,204 x $2.56) $13,322.24

C) Contribution (A - B)   $15,299.76

D) Less:- Fixed Costs-

(i) Part-Time Instructors (3 x $1,290) $3,870.00

(ii) Salary $4,392.00

(iii)Rent $1,638.00

(iv) Depreciation (on 30 bikes) $1,310.00

(v) Utilities & insuranc $1,928.00

Total Fixed Cost (i + ii + iii + iv + v) $13,138.00

Profit (C - D) $2,161.76

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