Question

Question 1 In the month of June, Mandeep's Beauty Salon gave 3,200 haircuts, shampoos and permanents at an average price of $35. During the month, foxed costs were $21,600 and variable costs were 75% of sales Determine the contribution margin in dollars, unit, and as a ratio. (Round contribution margin per unit to 2 decimal places, e.g. 5.27.) Contribution margin (in dollars) $ $ Contribution margin (per unit) Contribution margin (ratio) Attempts: 0 of 1 used SAVE FOR LATER SUSHI b. The parts of this question must be completed in order. This part will be available when you complete the part above The parts of this question must be completed in order. This part will be available when you complete the part above.

Answer 1

As per Problem,

Sales = $ 112000 (3200 x 35)

Variable Cost = 75% of Sales

Variable Cost = 75% x 112000

Variable Cost = 84000

variable cost per service = 84000 / 3200

variable cost per service = 26.25

Fixed Cost = 21600

• Calculation of Contribution Margin (in Dollars)

Contribution Margin (in Dollars) = Sale - variable expense

Contribution Margin (in Dollars) = 112000 - 84000

Contribution Margin (in Dollars) = $ 28000

• Calculation of Contribution Margin (in units)

Contribution Margin (in units) =  $\frac{Contribution Margin (in Dollars)}{revenue from per service}$

Contribution Margin (in units) =
28000 35

Contribution Margin (in units) = 800 Services

• Calculation of Contribution Margin (in ratio)

Contribution Margin (in ratio) = $\frac{sale price - variable cost per unit}{sale price}$

Contribution Margin (in ratio) = $\frac{35 - 26.25}{35}$

Contribution Margin (in ratio) = 0.25 or 25%