In the month of June, New Day Spa served 560 clients at an average price of $120.
Question:
In the month of June, New Day Spa served 560 clients at an average price of $120. During the month, fixed costs were $21,024 and variable costs were 60% of sales.
Instructions
(a) Determine the contribution margin in dollars, per unit, and as a ratio.
(b) Using the contribution margin technique, calculate the break-even point in dollars and in units.
Contribution MarginContribution 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
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118856994
4th Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
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