Potter Janitorial Services provides cleaning services to both homes and offices. In the past year, income...
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Potter Janitorial Services provides cleaning services to both homes and offices. In the past year, income before taxes was $4,250, as follows: Home Office Total Revenue $250,000 $425,000 $675,000 Less variable costs: Cleaning staff salaries 175,000 276,250 451,250 Supplies 30,000 42,500 72,500 Contribution margin $ 45,000 $106,250 151,250 Less common fixed costs: Billing and accounting Owner salary 25,000 90,000 Other miscellaneous miscellaneous Income before taxes 32,000 $4,250 For the coming year, Janice Potter, the company owner, would like to perform CVP analysis. She has asked you to help her address the following independent questions. (a) What are the contribution margin ratios of the Home and Office segments, and what is the overall contribution margin ratio? (Round overall contribution margin ratio answer to 5 decimal places, e.g. 52.75123 and other answers to 2 decimal places, e.g. 52.75.) Contribution margin ratio for Home Contribution margin ratio for Office Overall contribution margin ratio SUPI Potter Janitorial Services provides cleaning services to both homes and offices. In the past year, income before taxes was $4,250, as follows: Home Office Total Revenue $250,000 $425,000 $675,000 Less variable costs: Cleaning staff salaries 175,000 276,250 451,250 Supplies 30,000 42,500 72,500 Contribution margin $ 45,000 $106,250 151,250 Less common fixed costs: Billing and accounting Owner salary 25,000 90,000 Other miscellaneous miscellaneous Income before taxes 32,000 $4,250 For the coming year, Janice Potter, the company owner, would like to perform CVP analysis. She has asked you to help her address the following independent questions. (a) What are the contribution margin ratios of the Home and Office segments, and what is the overall contribution margin ratio? (Round overall contribution margin ratio answer to 5 decimal places, e.g. 52.75123 and other answers to 2 decimal places, e.g. 52.75.) Contribution margin ratio for Home Contribution margin ratio for Office Overall contribution margin ratio SUPI
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