Assignment: Better-Life Massage Clinic (BM)
Better-Life Massage Clinic (BM) provides various types of massage service at the price of $32. Currently, BM opens 30 days per month and serves 30 customers a day. BM pays its own masseuses the wage of $18 per customer and bears monthly fixed expenses of $350 for equipment (supplies, maintenance, and replacement) and $3000 for floor space overhead (space rent, lighting, water, etc.). Mrs. Stephens, the owner of the clinic, wants you to create a worksheet in which she can see the clinic's net monthly income. Furthermore, she wants you to consider the following problems so that she can have a clearer idea about BM's future direction:
1. Prepare a monthly income statement for BM. What is BM's current financial status (e.g., making a profit, a break-even, or a loss)? If it makes a loss, then make your recommendation on how many customers it must have to make a breakeven.
2. How much does the clinic have to charge (or at least the range of massage price) if it suffers from the economic downturn with only 16 customers per day?
3. How sensitive is the clinic's monthly bottom line figures (net income, total revenue, and total expenses) to the number of customers it serves (use the range in between 10 to 40 with the increment of 2)?
4. What is the exact number of customers per day BM must maintain to keep its breakpoint?
5. How sensitive is the clinic's net income to the changes in both number of customers and floor space overhead? Perform two-variable data table (# of customers changing from 10 to 40 with the increment of 2 ?& space overhead changing from $2000 to $4000 with the increment of $200).
Mrs. Stephens wants to move the store as an attempt to save in space overhead. According to the market ?study, if BM moves to a place with a cheaper space overhead, then it would lose 5 customers in every $200 saved in space overhead due to the bad location. Do you believe that she can do it while keeping BM not making a loss in net income? Support your answer.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.