Strategic Cost Management

ASSIGNMENT QUESTIONS

1. Estimate the current profit figures of SLS from December 2012 to May 2013 to evaluate the viability
of the business

After analysing the case

study thoroughly I can conclude
it by mentioning that the Space
and Light
studios improved a lot over
the past years. They managed
to trace their potholes and
overcome their problems to
become successful in the
market. Their revenues and
ratios say
everything about their
development over some years.
The only bottleneck they are
facing is
getting more customers and
hiring proper staff for their
classes. If they somehow
manage to
overcome this they will become
the best yoga classes in the
market.
Gros Profit Ratio:

(Gross Profit/Net Sales) *100

= 40600/95460) * 100
= 42.61%

Total Sales = $95460

Gross profit: Revenue – Cost of goods sold

= $(95460 – 54780)
= $40600

Net Profit Ratio: (Net Profit/Net Sales) * 100

 = (14201.5/95460) * 100
= 14.87%

Net Profit = $(40600 – 26398.5)

= $14201.5

Conclusion:

The conclusion of the ratios calculated comes out to be that the company is working great and is
not facing any losses hence the company is trying to work hard and increase its revenue.

2. Examine SLS's break-even point for May 2013.

3. Estimate the profitability of conducting each type of yoga class - i.e. group classes, private classes,
and 'Salt cave classes.

Profitability Ratios of the three different types of Yoga classes:

Private Classes:

Gross profit ratio: $(1260/2340) * 100

= 53.84%

Gross profit: $(2340-1080) = $1260

Net profit ratio: $(244.032340) * 100

= 1.03%

Salt Cave Classes:

Gross profit ratio: $(480/840) *100

=57.14%

Gross profit: $(840-360) = $480

Net profit ratio: $(252.27/840) *100

= 30.03%

Grouped Classes:

Gross profit ratio: $(12708/22008) *100

 = 57.7 %

Gross profit: $(22007-4300) = $12708

Net profit ratio: $(1486/22008) *100

= (6.75%)

The maximum revenue and outcome was given by the Salt Cave classes and the company should
lay more emphasis on Salt Cave classes only because it seems to be the most profitable out of all the
classes.

4. Consider the implications of the analyses above for SLS.

After analysing the case

study thoroughly I can conclude
it by mentioning that the Space
and Light
studios improved a lot over
the past years. They managed
to trace their potholes and
overcome their problems to
become successful in the
market. Their revenues and
ratios say
everything about their
development over some years.
The only bottleneck they are
facing is
getting more customers and
hiring proper staff for their
classes. If they somehow
manage to
overcome this they will become
the best yoga classes in the
market.
After analysing the case study
thoroughly I can conclude it by
mentioning that the Space and
Light
studios improved a lot over
the past years. They managed
to trace their potholes and
overcome their problems to
become successful in the
market. Their revenues and
ratios say
everything about their
development over some years.
The only bottleneck they are
facing is
getting more customers and
hiring proper staff for their
classes. If they somehow
manage to
overcome this they will become
the best yoga classes in the
market.
After analysing the case study
thoroughly I can conclude it by
mentioning that the Space and
Light
studios improved a lot over
the past years. They managed
to trace their potholes and
overcome their problems to
become successful in the
market. Their revenues and
ratios say
everything about their
development over some years.
The only bottleneck they are
facing is
getting more customers and
hiring proper staff for their
classes. If they somehow
manage to
overcome this they will become
the best yoga classes in the
market.
After analysing the case study
thoroughly I can conclude it by
mentioning that the Space and
Light
studios improved a lot over
the past years. They managed
to trace their potholes and
overcome their problems to
become successful in the
market. Their revenues and
ratios say
everything about their
development over some years.
The only bottleneck they are
facing is
getting more customers and
hiring proper staff for their
classes. If they somehow
manage to
overcome this they will become
the best yoga classes in the
market.
After analysing the case study
thoroughly I can conclude it by
mentioning that the Space and
Light
studios improved a lot over
the past years. They managed
to trace their potholes and
overcome their problems to
become successful in the
market. Their revenues and
ratios say
everything about their
development over some years.
The only bottleneck they are
facing is
getting more customers and
hiring proper staff for their
classes. If they somehow
manage to
overcome this they will become
the best yoga classes in the
market.
After analysing the case study
thoroughly I can conclude it by
mentioning that the Space and
Light
studios improved a lot over
the past years. They managed
to trace their potholes and
overcome their problems to
become successful in the
market. Their revenues and
ratios say
everything about their
development over some years.
The only bottleneck they are
facing is
getting more customers and
hiring proper staff for their
classes. If they somehow
manage to
overcome this they will become
the best yoga classes in the
market.
After analysing the case study
thoroughly I can conclude it by
mentioning that the Space and
Light
studios improved a lot over
the past years. They managed
to trace their potholes and
overcome their problems to
become successful in the
market. Their revenues and
ratios say
everything about their
development over some years.
The only bottleneck they are
facing is
getting more customers and
hiring proper staff for their
classes. If they somehow
manage to
overcome this they will become
the best yoga classes in the
market.
After analysing the case study thoroughly I can conclude it by mentioning that the space and
light studios improved a lot over the past years. They managed to trace their potholes and overcome
their problems to become successful in the market. Their revenues and ratios say everything about their
development over some years. The only bottleneck they are facing is getting more customers and hiring
proper staff for their classes. If they somehow manage to overcome it they will become the best yoga
classes in the market.

5. Conduct sensitivity analyses based on different scenarios of rental costs, fees paid to yoga teachers
and pricing.
6. Recommend a plan of action for the owners of SLS.

 The case study mentioned about a major problem faced by the SLS which is attracting
customers and good staff. According to me customers will recommend new people if
the atmosphere in the classes is good and it can only be improved if the SLS has well
trained and educated instructors.
 To attract new customers and get a competitive edge over their competitors the Space
and Light Studios should start advertising more and organise yoga awareness campaigns
to influence and attract people for a better cause
 The company has a lot of space to organise yoga classes in but according to the case
study they are only using less than 50% of their manpower and sources. So they should
effectively and efficiently use their resources to gain more customers and improve their
reputation and make a brand name in the market.