In the month of June, Bonita Beauty Salon gave2,920haircuts, shampoos, and perma

Question

In the month of June, Bonita Beauty Salon gave2,920haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $18,400and variable costs were60% of sales.


Determine the contribution margin in dollars, per unit, and as a ratio. (Round the contribution ratio to 0 decimal places, e.g. 27%)

Contribution Margin in Dollars
$
Contribution Margin Per Unit
$
Contribution Margin Ratio
% $ $ In the month of June, Bonita Beauty Salon gave2,920haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $18,400and variable costs were60% of sales.

Explanation / Answer

sales=2920*30=87600 fixed cost=18400 variable cost=.60*87600=52560 a) contribution margin=87600-52560=35040 b) variable cost per unit=52560/2920=$18 contribution margin per unit=30-18=$12 c) contribution margin ratio=(30-18)/30=.4=40%

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