In the month of June Paula\'s Beauty Salon gabe 3400 haircuts , shampoos and hai

Question

In the month of June Paula's Beauty Salon gabe 3400 haircuts , shampoos and haircuts at an average price of $38. During the month fixed cost were 18772and variable cost were 81% of sales.

Determine the contribution margin in dollars ,per unit and as a ratio. round contribution margin per unit to two decimal places e.g. 10.50 and the other ansers to zero decimal places e.g.125


contribution margin in dollars
contribution margin in unit
contribution margin ratio

using the contribution margin technique compute the break even point in dollars and units . round to zero decimal places e.g. 125

break even point in dollars
break even point in units

compute the margin of safety in dollars and as a ratio.

round answers to zero decimal places e.g. 125

margin of safety in dollars
margin of safety ratio

Explanation / Answer

Contribution margin in $= 38*(1-.81)=7.22 per unit Contribution margin in $= 3400*7.22=$24,548 Ratio 7.22/38=.19; 19% 18772/(1-.81)= 98,800= Break Even in $ 18772/7.22= 2,600 BE in units Margin of safety in $ 3400*38-98,800=$30,400 Ratio 30,400/3400*38= 0.24

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