Please assist with the 2nd question Khanyi is currently considering the possibility of setting up her own health spa in Greenpoint.She has an idea of the costs involved but needs to put together a business plan to present toher bank manager so she can secure the necessary funding. As her friend, she has asked foryour help and has given you the following estimates of costs and revenues:Costs• She has identified a suitable property that is currently being used for a similarpurpose. The cost of the lease will be R2 800 000 per annum.• The spa will be managed by a full time manager who will be paid R400 000 perannum. She will be assisted by an assistant manager who will be paid R280 000 perannum. There will also be 6 full time health professionals trained in variousdisciplines, each earning R110 000 per annum.•Repair and maintenance costs for the spa are estimated at R350 000 per annum.• The utilities (water and electricity) are expected to cost R325 000 per annum.•Advertising will cost R97 500 per annum.• The cost of breakfast is expected to be R35.50 per guest per day, lunch R62.25 perguest per day and evening meal R80.50 per guest per day.• Khanyi will employ local people to work as cleaning staff. They will be paid R75.00per hour. It is expected that a cleaner will be able to clean 2 rooms per hour and eachoccupied room will be cleaned daily. The main spa areas will be cleaned by part timestaff, at a budgeted cost of R100 000 per annum.• Towels and robes will be supplied to each resident. A clean set will be provided everyday. The cost of this is expected to be R50.00 per day per guest.• Each treatment involves some consumables and these are estimated to cost R149.00per treatment.Revenues• It is proposed that the price charged will be R1 850 per night, although Khanyi feelsthat the market could absorb a higher price. This price would be for use of the fitnessfacilities, all meals (breakfast, lunch and dinner), and clean laundry. Any treatmentswould be charged in addition to this.• Treatments will be charged at R250 each. It is expected that guests on average willchoose to have 2 treatments per day of their visit.• The spa will be able to accommodate a maximum 20 guests per night. It is expectedthat the spa will operate 360 days per year and on average will achieve 80%occupancy. The average stay of a guest will be 2 nights.REQUIRED:1. Calculate the daily revenue per guest that could be charged if Khanyi wanted toensure that a pre-tax profit of R1 800 000. You may assume that the estimatedoccupancy levels are maintained.2. The health spa ended up only managing to achieve a 60% occupancy. Calculthe daily revenue per guest that Khanyi would need to charge to avoid makinlosses. You may assume the costs are maintained.Neatness and Layout

Here discuss about the details of revenue and expenses which are incurred in the hospitality…

Khanyi is currently considering the possibility of setting up her own health spa in Greenpoint. She has an idea of the costs involved but needs to put together a business plan to present to her bank manager so she can secure the necessary funding. As her friend, she has asked for your help and has given you the following estimates of costs and revenues: Costs • She has identified a suitable property that is currently being used for a similar purpose. The cost of the lease will be R2 800 000 per annum. • The spa will be managed by a full time manager who will be paid R400 000 per annum. She will be assisted by an assistant manager who will be paid R280 000 per annum. There will also be 6 full time health professionals trained in various disciplines, each earning R110 000 per annum.

Khanyi is currently considering the possibility of setting up her own health spa in Greenpoint. She has an idea of the costs involved but needs to put together a business plan to present to her bank manager so she can secure the necessary funding. As her friend, she has asked for your help and has given you the following estimates of costs and revenues: Costs • She has identified a suitable property that is currently being used for a similar purpose. The cost of the lease will be R2 800 000 per annum. • The spa will be managed by a full time manager who will be paid R400 000 per annum. She will be assisted by an assistant manager who will be paid R280 000 per annum. There will also be 6 full time health professionals trained in various disciplines, each earning R110 000 per annum.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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