Question

As part of a January promotion, Ayayai Life Fitness Ltd. sold six-month memberships to its gym for $240. This also included a personal fitness assessment and training plan. Active Life normally charges $260 for a six-month membership and $65 for a personal fitness assessment and training plan.

Using the five-step model, determine the amount of revenue that Ayayai Life would recognize in January, assuming that 200 memberships were sold as part of this promotion and that all of the personal fitness assessments and training plans were completed in January.

Amount of revenue $_______

Answer 1

particulars	amount
sale price of 6 month membership plan	240.00
total memberships	200.00
normal price of mebership	260.00	0.8	=260/325
personal fintess assessment	65.00	0.2	=65/325
total	325.00
allocation of normal price to special offer for membeship;	192.00		=240*0.8
allocation of normal price to special offer for fitnesss	48.00		=240*.2
total value of membeship	240.00
membeship revenue (192/6) as it is for6 months	32.00
fitness revenue	48.00
total revenue to be recognised per members	80.00
total memberships	200.00
grand total revene for members	16,000.00