Question 1 In the month of March, Style Salon services 590 clients at an average

Question

Question 1 In the month of March, Style Salon services 590 clients at an average price of $120. During the month, fixed costs were $20,148 and variable costs were 62% of sales. Determine the contribution margin in dollars, per unit, and as a ratio. (Round answers to O decimal places, e.g. 1,225.) Contribution margin Contribution margin per unit Contribution margin ratio s LINK TO TEXT LINK TO TEXT Using the contribution margin technique, compute the break-even point in dollars and in units. (Round answers to O decimal places, e.g. 1,225.) Break-even sales Break-even sales linii

Explanation / Answer

Contribution margin=Sales-Variable costs

Contribution margin ratio=Contribution margin/Sales

Contribution margin[120(1-0.62)]*590 $26904 Contribution margin per unit=[120(1-0.62)] $46(Approx) Contribution margin ratio=(45.6/120) 38% Breakeven sales(Fixed cost/Contribution margin ratio)(20148/0.38) $53021(Approx) Breakeven sale(Fixed cost/Contribution margin)(20148/45.6) 442 units(Approx).

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