Advance Management accounting and performance management - Essay Example

Moreover, the demand will extensively rise next year due to the Olympic Games that will be hosted in the region (Heather, 2000). Therefore, a fitness club is the best business venture that can transform the Olympic Village post the Olympic Games that commence in 2012. Besides, initiating a fitness club is a fun and financially paying business that assists people get and remain strong, healthy and fit. Owning such a business enables an individual own an artistic and resourceful business in a recession-resistant field.

This business entails providing fitness services, which include individual training services, and BFIT rehab, which refers to a physical rehabilitation service. The club will also sell a range of nutritional, fitness and health products. These include the company’s own BFIT nutritionals at its stores that will be exclusive in the center (Curtis, 2003). The facilities that must be present at Rollin Fitness Center include cardio training equipments like 50Kg Barbell Dumbbell set, magnum fitness flat and auto incline treadmill; strength equipments like BNRG Proto Whey 5Lbs, power rack and smith machine and bench package.

Most gyms in Europe especially in UK charge ?500 to ?700 a month but to increase competitiveness, Rollin Fitness Center should charge ?450 to ?500 a month. . Per Unit Cost Statement It is very difficult to come up with per unit cost for a fitness club since the center offers more of service than goods (Jeff, 2004). The best way to go about it is through coming up with an hourly cost statement for any person who visits the center for fitness services. Now that monthly cost is like ?500, weekly cost will be; Monthly cost/ four (number of weeks in a month) ?

500/4 Weekly cost = ?125 Daily cost = ?125/7 Daily cost = 17.86 which is approximately ?18 per person Now, to determine the hourly cost for attending the gym, the daily cost should be divided by the number of hours the center operates in a day (Curtis, 2003). Rollin Fitness Center should be opened at 8 in the morning and closed at 6 in the evening which amounts to 10 hours per day. Therefore; ?18/10 Hourly cost = ?1.8 per person This is the best way to put the charges since most people like spending few hours in the gym.

Besides, since the Olympic Games are around the corner, most of the participants in the Olympic Games will only afford to spend few hours in the gym and that is the best cost for them (Kirk, 2000). Seven-year Budget Income Statement Year Number of people/day Daily income Monthly income Annual income Revenue (per year) Spent on operations Total relevant income/profit 2012 50 ?90 ?2700 ?32400 ?1000 ?5000 ?26400 2013 80 ?144 ?4320 ?51840 ?1100 ?6000 ?44740 2014 100 ?180 ?5400 ?64800 ?1200 ?7000 ?

56600 2015 120 ?216 ?6480 ?77760 ?1200 ?8000 ?68560 2016 140 ?252 ?7560 ?90720 ?1300 ?8000 ?81420 2017 160 ?288 ?8640 ?103680 ?1500 ?9000 ?93180 2018 180 ?324 ?9720 ?116640 ?1500 ?9000 ?106140 N/B the amount spent on operations and revenue charged