Question

In the month of June, Jose Hebert’s Beauty Salon gave 4,175 haircuts, shampoos, and permanents at an average price of $40. During the month, fixed costs were $16,700 and variable costs were 75% of sales.

(a)

Determine the contribution margin in dollars, per unit and as a ratio. (Round contribution margin and contribution margin per unit to 2 decimal places, e.g. 5.75.)

Contribution margin		$	41,750
Contribution margin per unit		$	10
Contribution margin ratio			25 %

(b)

Using the contribution margin technique, compute the break-even point in dollars and in units.

Break-even point		$
Break-even point			units

Answer 1