# Health-Temp Company is a placement agency for temporary nurses. It serves hospitals and clinics throughout the metropolitan

## Question:

Required:

1. Calculate the contribution margin per unit and the contribution margin ratio (express the ratio as a decimal rather than a percentage). If required, round your answers to two decimal places.

contribution margin per unit $

contribution margin ratio

2. Calculate the sales revenue needed to break even.

3. Calculate the sales revenue needed to achieve a target profit of $128,960.

4. What if Health-Temp had target operating income (profit) of $158,080? Would sales revenue be larger or smaller than the one calculated in Requirement 3?

- Larger OR Smaller?

By how much?

Contribution Margin

Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...

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**Related Book For**

## Cornerstones of Cost Management

**ISBN:** 978-1285751788

3rd edition

**Authors:** Don R. Hansen, Maryanne M. Mowen