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    Paula's Beauty Salon: Compute Contribution Margin, Break Even and Margin of Safety

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    In the month of June, Paula's Beauty Salon gave 3400 haircuts, shampoos, and permanents at an average price of $34. During the month, fixed costs were $12716 and variable costs were 83% of sales.

    A) Determine the contribution margin in dollars, per unit, and as a ratio.
    B) Using the contribution margin technique, compute the break-even point in dollars and in units.
    C) Compute the margin of safety in dollars and as a ratio.

    © BrainMass Inc. brainmass.com June 4, 2020, 1:44 am ad1c9bdddf
    https://brainmass.com/business/financial-ratios/paula-s-beauty-salon-compute-contribution-margin-break-even-and-margin-of-safety-417247

    Solution Summary

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