CALCULATOR | | PRINTER VERSION | ?BACK NEXT Exercise 18-10 (Part Level Submissio

Question

CALCULATOR | | PRINTER VERSION | ?BACK NEXT Exercise 18-10 (Part Level Submission) In the month of March, Style Salon services 630 clients at an average price of $ 1 fixed costs were $ 28,032 and variable costs were 60 % of sales. 60. During the month, Determine the contribution margin in dollars, per unit, and as a ratio. (Round answers to O decimal places, e.g. 1,225.) Contribution margin Contribution margin per unit s Contribution margin ratio Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT VIDEO: APPLIED SKILLS

Explanation / Answer

(a)Contribution Margin

Sale Price per unit          = $160 per unit

Variable Cost per unit = $160*60% = $96 per unit

Contribution margin per unit = $160 - $96 = $64 per unit

Contribution Margin = 630 * $64

                                 = $40,320

(b) Contribution margin per unit = $64 per unit

(c)Contribution Margin Ratio = ( $64 / $160 ) * 100 = 40%

                             Or

100% - Variable cost ratio = 100% - 60% = 40%

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