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Determine the contribution margin in dollars, per unit, and as a ratio. (Round answers to 0 decimal places, e.g. 1,225.) Cont


In the month of March, Style Salon services 610 dients at an average price of $ 140 Duning the month, fixed costs were $ 21,4
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Answer #1
1)
a. Contribution margin $       29,890
Working;
Contribution margin = Units * (Selling price per unit - Variable cost per unit)
= 610 * (140-(140*65%))
= 610 * $    49.00
= $       29,890
b. Contribution margin per unit $               49
Working:
Contribution margin per unit = Sales per unit - variable cost per unit
= 140-(140*65%)
= $               49
c. Contribution margin ratio 35%
Working;
Contribution margin ratio = (1-Variable cost percentage)
= 1-0.65
= 35%
2) a. Break even sales $       61,320
Working;
Break even sales = Fixed Cost / Contribution margin ratio
= $       21,462 / 35%
= $       61,320
b. Break even sales                 438 Units
Working;
Break even sales = Fixed Cost / Contribution margin per unit
= $       21,462 / $          49
=                 438
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