In this report, we are discussing the budget and the financial management system of the fitness center which is upset due to COVID-19, as they make contingency plans for identifying the risk and solving them. In this report, we are also discussing the current issues and the issues that arise after the implementation of the contingency plan, and also the budget variance in the variance.
The financial management system of the fitness center is upset due to COVID-19, as they make contingency plans for identifying the risk and solving them. The income of that year is 20% of the contingency plan so that is why now they have to redevelop the contingency plan again for the organization, but the company is paid their software fees which are used for the video of the gym classes for the virtual membership.
The issue in the financial statement is that the company has suffered more losses due to government lockdowns being extended. The initial lockdown was extended until 12th July. Endurance Fitness resumed in-person classes on the 13th of July.
However, due to a surge in the number of new COVID-19 infections in Victoria, gyms were forced to shut their doors once again on 12th August. It is expected that Endurance Fitness can commence in-person classes once again on 5th October.
Due to this COVID-19 impact on income:
The company acquired the following corporate clients, who purchased virtual memberships for their employees working from home
Archer Tech – 15 memberships
JP Engineering – 10 memberships
In pharma – 20 memberships
|Income line item||Forecast||Actual||Variance %|
|Full membership – 12 months||1,20,821.76||24,164.35||96657.41|
|Full membership – 6 months||9,331.56||1,866.31||7465.25|
|Full membership – 3 months||4,312.44||862.49||3449.95|
|Month to month – 3 classes per week||17,429.73||3,485.95||12943.78|
|Month to month – all classes||11,130.13||2,226.03||7644.18|
|10 class passes||1,111.32||222.26||889.06|
|Weekly drop-in/ visitor||332.51||400.00||2932|
|Daily drop-in/ visitor||582.12||600.00||(17.88)|
|Gym management software||4,061.13||862.99||3198.14|
|Depreciation of equipment||5,569.73||1,183.57||4386.16|
The conclusion is that the fitness center is suffering from the COVID-19 situation so for that they develop a contingency plan for the company but to the new guidelines, they should extend the opening date from 6 July to 21 July. In this report, the company tries to maximize its profit by implementing the action plan and the contingency plan in the company so that they extend its profitability. Companies should follow the contingency plan and review their plan also time to time. To maximize the profit, they have to reduce their expenses and increase their sale by adopting strategies.