Question

6 of 6 (0 complete) Score: 0 of 20 pts P21-31A (similar to) HW Score: 0%, 0 of 100 p Question Help Utopia 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. i Data Table = Contribution margin ratio Benson Morton Utopia Pool Cleaning Service Income Statement Filip For the Month Ended July 31, 2018 Benson Morton $ 4,800 $ 2,400 $ 1,440 1,200 Service Revenue Filip 3,000 $ 1,500 Total 10,200 4,140 i Requirements Variable Costs Contribution Margin 3,360 1,200 1,500 Fixed Costs 6,060 5,500 560 Operating Income 1. Calculate the contribution margin ratio for each business segment. 2. The business segments had the following numbers of customers: Benson, 80; Morton, 40; and Filip, 50. Compute the service revenue per customer, variable cost per customer, and contribution margin per customer for each business segment. 3. Which business segment was most profitable? List some possible reasons why this segment was most profitable. How might the various reasons affect the company in the long term? Print Done Print Done Choose from any list or enter any number in the input fields and then click Check Answer A parts 4 remaining Clear All Check Answer

Answer 1

1.contribution/sales =contribution margin ratio

benson 3360/4800=70%

morton 1200/2400=50%

filip 1500/3000=50%

2.service revenue per customer=total service revenue/total customer

benson 4800/80=$60 per customer

morton 2400/40=$60 per customer

filip 3000/50=$60 per customer.

variable cost per customer=total variable cost/total customer

benson 1440/80=$18

morton 1200/40=$30

filip 1500/50=$30

contribution margin per customer=service revenue per customer-variable cost per customer

benson 60-18=$42

morton 60-30=$30

filip 60-30=$30

3.benson business line is more profitable.

reasond:-

a)variablecost per unit is very low as compared to other two lines.

b)contribution margin per unit is higher at this business line.

c) number of customer also more in this business line.

the above mentioned reasons affecting the companys long run in following ways:-

a)the best goal of every business is provide best service to customers at lower cost,then company can make more profit

b)company will support to produce more units of product/service which have higher contribution margin.

c) the main factor of success of a business for long run is demand by the customer.