Question

Professional Pool Cleaning Service provides pool cleaning services to residential customers. The company has three employees, each assigned to specific customers. The company considers each employee's territory as a business segment. The company incurs variable costs that include the employees' wages, pool chemicals, and gas for the service vans. Fixed costs include depreciation on the service vans. Following is the income statement for the month of July (Click the icon to view the income statement.) Read the requirements, Requirement 1. Calculate the contribution margin ratio for each business segment. Contribution margin Service revenue - Contribution margin ratio Birman 1,500 $ 3,000 = 50 % Meech 1,050 / $ 3,500 = 30 % Frond 800 / $ 2,000 = 40 % Requirement 2. The business segments had the following numbers of customers: Birman, 60; Meech, 70; and Frond, 40. Compute the service revenue per customer, variable cost per customer, and contribution margin per customer for each business segment. Service revenue per customer Variable costs per customer Contribution margin per customer i Data Table Birman Meech Frond Professional Pool Cleaning Service Income Statement For the Month Ended July 31, 2018 Birman Meech Frond $ 3,000 $ 3,500 $ 2,000 S 1,500 1,200 Service Revenue Variable Costs Contribution Margin Total 8,500 5,150 2,450 1,500 1,050 800 3,350 3,000 Enter any number in the edit fields and then click Check Answer. Fixed Costs S 350 Operating Income parts

Answer 1

Calculate following

	Service revenue per customer	variable cost per customer	Contribution margin per customer
Birman	3000/60 = 50	1500/60 = 25	25
Meech	3500/70 = 50	2450/70 = 35	15
Frond	2000/40 = 50	1200/40 = 30	20