Question

1. Think of a business & describe what's occurring in relation to costs.

2. In the previous couple years what changes has that business made? Have they saved costs, was cost too high at one point which minimized profit?

Answer 1

ANS 1

The business that have been considered in this answer is of the fitness gym, the fitness gym is a business that runs constantly round the year, this is because the people are concerned about their fitness and well being all the time, this is the business which is found in each and every economy. The costs that are associated with the fitness gym are handling costs of the machinery or gym equipment and these machienery also get depriciated, so teh gym also have to take care of depriciation costs. The other costs that are associated with this business is the replacement cost of the machienery and wages of the trainers which come under the variable costs. The costs like electricity bill, liscensing come under the fixed cost for this business.

ANS 2

In recent years the gym and fitness centres have made a lot of advancements in their setups like the inclusion of zumba, more automated machienes , mixed martial arts etc. These advancemets may also include hiring of new staff and purchase of new machienery. The shapes and curves gym which is located in South Delhi, India experienced a loss at the end of 2019 due to their advancements and this short term loss was recovered once their new services were utilizes by the customers. The 2020 also witnessed the loss in Shapes ans Curves gym because of the Covid -19 breakdown as the operations were closed but the liscensing , rent and electricity bills were still to be paid.