Contribution Margin & Margin of Safety
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In the month of June, Paula's Beauty Salon gave 4,000 haircuts, shampoos, and permanents at an average price of $37. During the month, fixed costs were $21,312 and variable costs were 76% of sales.
Determine the contribution margin in dollars, per unit, and as a ratio. (Round contribution margin per unit to 2 decimal places, e.g. 10.50, and the other answers to 0 decimal places, e.g. 125.)
Contribution margin in dollars $
Contribution margin per unit $
Contribution margin ratio %
Using the contribution margin technique, compute the break-even point in dollars and in units. (Round answers to 0 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 0 decimal places, e.g. 125.)
Margin of safety in dollars $
Margin of safety ratio %
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Solution Summary
The solution computes Contribution margin in dollars, Contribution margin per unit, Contribution margin ratio, Break-even point in dollars, Break-even point in units, Margin of safety in dollars, Margin of safety ratio.
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In the month of June, Paula's Beauty Salon gave 4,000 haircuts, shampoos, and permanents at an average price of $37. During the month, fixed costs were ...
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