Question

the following monthly data are available for sunset nail salon which provides manicures for nursing home parientes who are charger $22 per manicure. it’s unit variable costs are $16 and it’s total fixed expenses are $5,400. revenue during april totaled 1600 units.

please solve A, B and C

wata are available for Beach Nail Salon which provides manicures nursing home patients who are charged $22 per manicure. Its unk variable counter $16 and its total fixed expenses are $5,400. Revenue during April totaled 1.600 units. a) How much is the break-even point in sales dollars for Beach Nail Salon? b) How many manicures must the company provide in order to earn a profit of $3,1807 as a form of advertising. The cost to sponsor the team is $1,320. How many more manicures must be provided to cover this cost?

Answer 1

Answer

· Working

A	Service revenue per unit	$22
B	Unit Variable cost	$16
C = A-B	Unit contribution margin	$6

· Requirement asked, with workings

A	Total Fixed cost	$5,400
B	Unit contribution margin	$6
C = A/B	Units to be sold to break even	900
D	Service revenue per unit	$22
E = C x D	Break even point in sales dollars	$19,800	Answer [a]

A	Profit required	$3,180
B	Total Fixed cost	$5,400
C = A+B	Total contribution margin required	$8,580
D	Unit contribution margin	$6
E = C/D	No. of manicures to be provided to earn target profits	1430	Answer [b]

A	Additional cost of advertising	$1,320
B	Unit contribution margin	$6
C = A/B	Additional no of manicures to cover this cost	220	Answer [c]