Question

In the month of March, Riverbed Salon services 570 clients at an average price of $150. During the month, fed costs were $28.800 and variable costs were 68 of a (a) ZYour answer has been saved and sent for grading. See Gradebook for score details Determine the contribution margin in dollars, per unit, and as a ratio. Contribution margin 27360 Contribution margin per unit Contribution margin ratio VIDEO AND SKILLS Attemptsi 1 of 1 used (b) Using the contribution margin technique, compute the break-even point in dollars and in units Break-even sales Break-even sales units

Answer 1

Clients 570 Average price $150 Fixed costs $28,800 Variable costs 68 % x $150 $102 (a) Contribution Margin Sales- Variable Costs ($150 x 570) ($102 x 570) $27,360 Contribution Margin per unit Selling price per unit - Variable costs perunit = $150 $102 $48 Contribution margin ratio (Selling price perunit- Variable costs per unit)/Selling price ($150 $102)/ $150 32 % (b) Break-evensales = Fixed Costs/Contribution margin ratio =$28,800 0.32 $90,000 Break-even sales = Fixed Costs/Contribution margin per unit - $28,800 /$48 600 units