Bounce Fitness is a premier provider of fitness and wellness in Australia. It is made up of four fitness centres. Head office is currently established in Cairns, Queensland. The other centres are in...

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Bounce Fitness is a premier provider of fitness and wellness in Australia. It is made up of four fitness centres. Head office is currently established in Cairns, Queensland. The other centres are in Brisbane, Sydney and Melbourne.


To complete this task, you are required to review theProfit and Loss Report of Bounce Fitness in Cairns.




Profit and Loss-Cairns




Analyze and review the information in the profit and loss report – then provide detailed answers to the questions in the following Budget Report Template:




BSBFIN501 Task 3 Budget Report Template.docx


· Completed Budget Report Template




Profit and Loss – Cairns Cairns Year 20X1 Year 20X2 Sales Casual Attendance 53,100 53,100 Memberships 241,000 241,000 Equipment and Clothing 29,000 29,000 Total Sales $ 323,100 $ 323,435 Direct Cost of Sales Equipment and Clothing 8,700 8,874 Total Cost of Sales $ 8,700 $ 8,874 Gross Margin $ 314,400 $ 314,561 Gross Margin % 97% 97% Operating Expenses Advertising 117,000 134,550 Bank Service Charges 6,000 6,000 Credit Card Fees 3,000 3,003 Insurances 12,000 12,000 Miscellaneous 2,400 2,402 Head Office Contribution – – Payroll 195,000 204,750 Team Building 15,500 17,050 Professional Fees 20,000 20,000 Rent or Lease 48,000 48,000 Subscription & Dues 3,000 3,000 Supplies 30,000 28,500 Taxes & Licenses 2,400 2,400 Utilities and Telephone 9,500 9,975 Equipment Leases 12,000 12,000 Maintenance 11,800 11,800 Total Operating Expenses $ 487,600 $ 515,431 Profit before Interest and Taxes (EBIT) $ (173,200) $ (200,870) Interest – – Corporate Taxes – – Net Profit (or Net Income) $ (173,200) $ (200,870) Budget Report Review BSBFIN501 Task 3 Budget PROFIT & LOSS REVIEW Review the Profit and Loss Report attached in your Assessment Task 3 Analyse and review the information – then provide detailed answers to the following Type or Section of Plan Profit and Loss Is the cost of sales worth keeping the lines open? Discuss the profit or loss this is causing and what recommendations you would make. . Review all of the figures – are the total calculations correct ? Identify any errors you can locate Has the increased cost in advertising had any impact on profit? Give details: Review the operating expenses and outline figures that have altered and in what way Overall, what is your opinion on the Net Profit/Loss final figures for the organisation. Answer this in your own words. 1 BSBFIN501 – Budget Report Template Capital College RTO: 41593 | CRICOS: 03537J | CAN: 606 797 611 | ABN: 16 606 797
Answered 1 days AfterJun 06, 2022

Answer To: Bounce Fitness is a premier provider of fitness and wellness in Australia. It is made up of four...

Khushboo answered on Jun 07 2022
86 Votes
Budget Report Review
    BSBFIN501 Task 3 Budget PROFIT & LOSS REVIEW
Review the Profit and Loss Report attached in your Assessment Task 3
Analyse and review the information – th
en provide detailed answers to the following
    Type or Section of Plan
    Profit and Loss
    Is the cost of sales worth keeping the lines open?
Discuss the profit or loss this is causing and what recommendations you would make.
    The entity’s sales revenue is $323,100 and $323,435 in year 20X1 and 20X2 respectively whereas the cost of sales is only $8,700 and $8,874 in year 20X1 and 20X2 respectively. It shows that the entity is having cost of sales as 3% only and the entity is having 97% gross margin to cover its operating and other expenses. The cost of sales is worth keeping the lines open because the cost of sales is very low and the entity is having very higher margin for other expenses.
The profit and loss of the entity is not significantly impacted by cost of sales because the cost of sales is only 3% of sales revenue. The entity has incurred losses in both years mainly due to higher operating and non- operating expenses and it is recommended the entity to reduce the operating expenses in significant manner to keep the line opens and to achieve target profitability.
    Review all of the figures – are the total calculations correct ?
Identify any errors you can locate
    In the case, there are some errors in calculation. The total sales for year 20X2 are $323,435 whereas if we add the all the three-line items of sales revenue i.e., casual attendance $53,100, memberships $241,000 and Equipment and clothing $29,000 then the total will come $323,100 whereas the total has been shown as $323,435 which shows that there is error of $335 ($323,435- $323,100) in year 20X2. Further, the...
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