Maria is opening a fitness center in her local area. She’ll offer regular monthly memberships that give access to gym eq
Posted: Sun Jul 03, 2022 3:17 pm
Maria is opening a fitness center in her local area. She’lloffer regular monthly memberships that give access to gym equipmentand standard fitness classes. She’ll also sell premium fitnessclasses, which require members to pay an extra fee each time theyattend. In addition, the fitness center will sell dietarysupplements. Maria must be sure to account for the cost of thesupplements too or she’ll lose money. As Maria plans for the comingmonths, she notes three things:
Besides the monthly lease, the fitness center needs insurancecoverage to protect against damage from a storm or fire and tocover any claims from members getting hurt. Maria will leaseweights and cardio equipment and will have a monthly payment forthat. She’ll also pay for utilities monthly and will pay salariesfor the staff who run the facility. All of these expenses will stayroughly the same no matter how many members come in each day.
The instructor for the premium bootcamp class charges $50 perclass. If Maria doesn’t have any members who want that class, shewon’t need to pay that $50 instructor charge. If she has enoughmembers to run that class 10 times each week, she’ll need to paythe instructor $500 ($50 x 10) per week to run the class.
If there is no demand to sell protein powder, then Maria won’thave any expenses associated with it. If 100 members want to buyprotein powder each month, Maria will need to purchase 100 bottlesfrom her wholesaler. If 200 members want to buy it, then she’llneed to purchase 200 bottles. There is a direct link between hersales levels for protein powder and the expenses related to thosesales.
1. Besides the monthly lease, the fitness center needsinsurance coverage to protect against damage from a storm or fireand to cover any claims from members getting hurt. Maria will leaseweights and cardio equipment and will have a monthly payment forthat. She’ll also pay for utilities monthly and will pay salariesfor the staff, who run the facility. What type of costs are theseexpenses?
Inelastic costs
Variable costs
Fixed costs
Breakeven costs
2. If there is no demand to sell protein powder, then Mariawon’t have any expenses associated with it. If 100 members want tobuy protein powder each month, Maria will need to purchase 100bottles from her wholesaler. If 200 members want to buy it, thenshe’ll need to purchase 200 bottles. There is a direct link betweenher sales levels for protein powder and the expenses related tothose sales. These expenses would be referred to as ________.
total costs
marginal costs
variable costs
fixed costs
3. The instructor for the premium boot camp class chargesMaria $50 per class. However, a new fitness instructor approachesMaria about trying to teach at her gym. The instructor is just asqualified to teach as Maria’s current fitness instructor, and aftera detailed review of the new fitness instructors’ class Mariabelieves that both instructors are fit to teach the class. However,Maria cannot afford to keep both instructors. The new fitnessinstructor will only charge Maria $35 per class. Maria likes thatthe new instructor is cheaper and, in the end, goes with the newinstructor. Maria’s demand for a fitness instructor was________.
marginal
elastic
inelastic
fixed
Besides the monthly lease, the fitness center needs insurancecoverage to protect against damage from a storm or fire and tocover any claims from members getting hurt. Maria will leaseweights and cardio equipment and will have a monthly payment forthat. She’ll also pay for utilities monthly and will pay salariesfor the staff who run the facility. All of these expenses will stayroughly the same no matter how many members come in each day.
The instructor for the premium bootcamp class charges $50 perclass. If Maria doesn’t have any members who want that class, shewon’t need to pay that $50 instructor charge. If she has enoughmembers to run that class 10 times each week, she’ll need to paythe instructor $500 ($50 x 10) per week to run the class.
If there is no demand to sell protein powder, then Maria won’thave any expenses associated with it. If 100 members want to buyprotein powder each month, Maria will need to purchase 100 bottlesfrom her wholesaler. If 200 members want to buy it, then she’llneed to purchase 200 bottles. There is a direct link between hersales levels for protein powder and the expenses related to thosesales.
1. Besides the monthly lease, the fitness center needsinsurance coverage to protect against damage from a storm or fireand to cover any claims from members getting hurt. Maria will leaseweights and cardio equipment and will have a monthly payment forthat. She’ll also pay for utilities monthly and will pay salariesfor the staff, who run the facility. What type of costs are theseexpenses?
Inelastic costs
Variable costs
Fixed costs
Breakeven costs
2. If there is no demand to sell protein powder, then Mariawon’t have any expenses associated with it. If 100 members want tobuy protein powder each month, Maria will need to purchase 100bottles from her wholesaler. If 200 members want to buy it, thenshe’ll need to purchase 200 bottles. There is a direct link betweenher sales levels for protein powder and the expenses related tothose sales. These expenses would be referred to as ________.
total costs
marginal costs
variable costs
fixed costs
3. The instructor for the premium boot camp class chargesMaria $50 per class. However, a new fitness instructor approachesMaria about trying to teach at her gym. The instructor is just asqualified to teach as Maria’s current fitness instructor, and aftera detailed review of the new fitness instructors’ class Mariabelieves that both instructors are fit to teach the class. However,Maria cannot afford to keep both instructors. The new fitnessinstructor will only charge Maria $35 per class. Maria likes thatthe new instructor is cheaper and, in the end, goes with the newinstructor. Maria’s demand for a fitness instructor was________.
marginal
elastic
inelastic
fixed