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10 May, 10:20

In the month of March, Ivanhoe Salon services 550 clients at an average price of $150. During the month, fixed costs were $26,880 and variable costs were 60% of sales. (a) Determine the total contribution margin in dollars, the per unit contribution margin, and the contribution margin ratio. Contribution margin in dollars $ 60 Contribution margin per unit $ 180 Contribution margin ratio %

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  1. 10 May, 12:09
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    Variable cost = 60% x $150 = $90

    a) Total contribution margin in dollars = ($150 - $90) x 550 = $33,000

    b) Unit contribution margin = 150 - 90 = $60

    c) Contribution margin ratio = 60/150 = 40%
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