Cash-Volume Profit and Break-Even Analysis

Cash-Volume Profit and Break-Even Analysis

  • Submitted By: rlg1628
  • Date Submitted: 05/15/2013 1:04 PM
  • Category: Business
  • Words: 1834
  • Page: 8
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Cash-Volume Profit and Break-Even Analysis of Snap Fitness Center
Week Five
Accounting, ACC/561
April 29, 2013
Facilitator Monique Smalling


Cost-Volume Profit (CVP) analysis is a method of examining and analyzing the relationships between businesses’ fixed and variable cost and profits. The three main tools of CVP analysis, includes breakeven analysis, contribution margin analysis and operating leverage. Team D is initiating into the opportunity to start its own Snap Fitness Franchise. The purpose of these presentations is to provide answers to five significant questions about Snap Fitness Franchise. The first part of these presentations starts with the introduction, and proceeds into the history of Snap Fitness. The third part of this presentation shows the team members estimate cost-volume profit (CVP) analysis of the variable and fixed costs. Estimate the fixed costs monthly operating expenses and the equipment lease. The monthly sales in members and dollars to achieve a target net income of $10,000 for the month. Finally, Franchise or not, purchasing franchise informations, and a summary of the franchise information needed to decide if, entering into a franchise agreement would be viable.

History of Snap Fitness Center

Peter Taunton founded Snap Fitness Center in 2003 in Chanhassen, Minnesota. Peter had a vision to give consumers a fast, convenient, and affordable workout alternative to traditional "big box" health clubs and entrepreneurs a practical model to run his or her own business. Peter commitment to providing both members and franchise owners with new tools and programs to help them achieve results. Presently, Snap Fitness Centers showing annual revenue as $ $31.8 million, start-up cost ranges from $60,000 to $184,000, franchise fee of $15,000, and monthly royalties of $449. The world’s fastest growing fitness franchise with nearly 2,200 locations open and under...

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