Question 1

1 / 1 pts
Which of the following statements is correct regarding the background of Space and Light
studios (hereafter "SLS"). (Check one answer.)

Lynn and Sumei started the yoga studio from scratch.

Lynn and Sumei stopped being yoga teachers at SLS after the takeover.

Lynn and Sumei paid Verita a lump sum to buy over its yoga business.

Lynn and Sumei took over the yoga studio from an existing holistic wellness center, Verita.

Question 2
1 / 1 pts
Which of the following statements is incorrect regarding Lynn and Sumei’s current concerns
and challenges? (Check one answer.)

They need to retain and attract good yoga instructors.

They need to price their yoga classes competitively with respect to other yoga studios.

They need to offer fewer group yoga classes to cut costs.

They need to attract new customers to increase capacity and increase revenue.

Question 3
1 / 1 pts
Cost-volume-profit (CVP) analysis is a useful management accounting tool to facilitate and
improve managers’ decisions. Which of the following is not one of the primary purposes of CVP
analysis? (Check one answer.)
Activity-based costing

Pricing decisions

Break-even analysis

Sensitivity analyses based on different scenarios of fixed costs, variable costs, and price

Question 4
2 / 2 pts
Which of the following statements is incorrect regarding the information about fixed costs
provided in the case? (Check one answer.)
Note: Unless otherwise noted, all dollar amounts in the case and in this quiz are expressed
in Singapore dollars (S$).

SLS rented a 1,900 square-foot space and the median rent in its area was $5.89 per square foot.

SLS paid $70 monthly for subscription to a web-based business management software,
MINDBODY (MB).

SLS paid a monthly fee of $3,500 to Verita for the use of shared facilities and administrative
services.

SLS paid a monthly fee of $700 to Verita for their share of the shuttle bus service.

Question 5
2 / 2 pts
Which of the following statements is incorrect regarding the information about the group yoga
classes provided in the case? (Check one answer.)

The average revenue per client was $10 in December 2012 and January 2013.
The average revenue per client was $21 in April and May 2013.

The average revenue per client was $15 in February and March 2013.

The average revenue per client that SLS earned from each client visit to a group yoga class
steadily declined from December 2012 to May 2013.

IncorrectQuestion 6
0 / 2 pts
Which of the following statements is incorrect regarding the information about the semi-private
classes conducted in a salt cave (hereafter “salt stretch classes”) provided in the case and the
exhibits? (Check one answer.)

The average revenue per client visit was $70 from December 2012 to May 2013.

In May 2013, 6 salt stretch classes were conducted.

In May 2013, there were 18 client visits to salt stretch classes.

For each salt stretch class, SLS would pay Verita a rental fee ranging from $30 to $45,
depending on the head count.

Question 7
2 / 2 pts
Which of the following statements is incorrect regarding the information about the private
classes provided in the case and the exhibits? (Check one answer.)

For each private class, SLS would pay Verita a rental fee.
The average revenue per client visit was $130 from December 2012 to May 2013.

In May 2013, 18 private classes were conducted.

Clients had the choice of one-on-one sessions or arranging to take these classes with a partner.

IncorrectQuestion 8
0 / 4 pts
If only group classes were offered, assuming that all of the costs associated with the running
of group classes (including teachers' wages) are fixed costs, using the median rent, average rate
for yoga teachers, and the average revenue per client visit for May 2013, calculate the break-
even number of client visits for group class.
Please refer to the Exhibit Download the Exhibitwhen you conduct the break-even analysis.
Note: Please conduct the analysis using Singapore dollars. In 2013, 1 U.S. Dollar (US$) = 1.25
Singapore dollar (S$). For the cost item stated in U.S. dollars (US$), you can use this conversion
rate to convert the U.S. dollar amount to Singapore dollars when you conduct the break-even
analysis.

To calculate the break-even number of client visits for group yoga classes at Space &
Light Studios, we need to identify the fixed costs and the revenue per client visit. We'll
then use the break-even formula:

Break-even point (in client visits)=Total Fixed Costs/Average Revenue per Clie
nt VisitBreak-even point (in client visits)=Average Revenue per Client Visit/Total Fixed Costs

1. Fixed Costs Calculation:

 Rent: SLS rented a 1,900 square-foot space and the median rent was $5.89 per
square foot.
 Yoga Teacher Wages: The average rate for yoga teachers was known to be
around $60 per class, but we'll need to calculate the monthly cost based on the
number of group classes conducted.
 MINDBODY Subscription: The monthly subscription fee for the MINDBODY
software was US$70, which needs to be converted to Singapore dollars using the
2013 exchange rate (1 US$ = 1.25 S$).
2. Average Revenue per Client Visit:

 For May 2013, the average revenue per client visit to a group yoga class was $21.

Detailed Calculations:

Fixed Costs:

 Rent: 1,900 sq ft×$5.89/sq ft=$11,1911,900 sq ft×$5.89/sq ft=$11,191

 MINDBODY Subscription: ��$70×1.25=�$87.5US$70×1.25=S$87.5
(rounded to $88 for simplicity)
 Teacher Costs: Assuming there are 155 group classes in May 2013 (from case
information), and each class costs $60 for the teacher:
155 classes×�$60=�$9,300155 classes×S$60=S$9,300

Total Fixed Costs per Month:

�$11,191+�$88+�$9,300=�$20,579S$11,191+S$88+S$9,300=S$20,579

Break-even Calculation:

Break-even point=�$20,579�$21/visitBreak-even point=S$21/visitS$20,579

Let's perform this calculation to find the exact number of client visits required to break
even.

IncorrectQuestion 9
0 / 1 pts
Which of the following is not an assumption made for the break-even analysis in Question
8? (Check one answer.)

Whether the rent is calculated at the minimum, median, or maximum level

Whether the calculation relies on the minimum, average, or maximum revenue per client visit for
private classes

Whether the rate paid for yoga teachers is calculated at the minimum, average, or maximum
level
Whether the calculation relies on the minimum, average, or maximum revenue per client visit for
group classes

IncorrectQuestion 10
0 / 4 pts
Again, if only group classes were offered, assuming that all of the costs associated with the
running of group classes (including teachers' wages) are fixed costs, and using
the maximum rent, average rate for yoga teacher and the average revenue per client visit for
May 2013, calculate the break-even number of client visits for group classes for SLS.
Please refer to the Exhibit Download the Exhibitwhen you conduct the breakeven analysis.
Note: Please conduct the analysis using Singapore dollars. In 2013, 1 U.S. Dollar (US$) = 1.25
Singapore dollar (S$). For the cost items stated in U.S. dollars (US$), you can use this
conversion rate to covert the U.S. dollar amount to Singapore dollars before you conduct the
breakeven analysis.

Quiz Score: 9 out of 20

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