Question

In the month of June, Jose Hebert's Beauty Salon gave 4,200 haircuts, shampoos, and permanents at an average price of $25. During the month, fixed costs were $16,800 and variable costs were 75% of sales. Determine the contribution margin in dollars, per unit and as a ratio. (Round contribution margin and contribution margin per unit to 2 decimal places, e.g. 5.75.) Contribution margin Contribution margin per unit Contribution margin ratio LINK TO TEXT VIDEO: SIMILAR EXERCISE Using the contribution margin technique, compute the break-even point in dollars and in units. Break-even point Break-even point units LINK TO TEXT VIDEO: SIMILAR EXERCISE Compute the margin of safety in dollars and as a ratio. Margin of safety Margin of safety ratio

Answer 1

contribution margin contribution margin per cenit contribution margin ratio $126250 16.25 [25 % working Notes contribution margin = sales - variable cost contribution marcan unit i = selling price - variable costjonit! contribution margin ratio I sa contribution margin x100 Sales 002 contribution margin = 42000$25 -0.75 (105000 - $105000 - $78750 s $26250 contribution margan onit .. $25-05(25) – $25 - 18.75 $ 6025

| contribution margin ratio $ $ 262 50 X 100 $10.5000; S 2.5 Break even point $ 67200 (2688 cenits Break even point ur working Notes in o Break even point an units. = Foxed cost contribution/ unit $16800 = 2688 cenits ronast $ 6.25 on oi Break even poant in B E. 2688 units X $25 $ 67200 -

margin of margan of safety safety ratio $137800 [ 3601 working Notes margin of safety = Sales - Break even sales. 667200 = - $ 105000 $37800 margin of safety of = $37800 X 100 $105000 = 364 c margin of safety xloo) Sales