Question

Exercise 6-2 (Video) In the month of June, Jose Hebert’s Beauty Salon gave 4,200 haircuts, shampoos, and permanents at an average price of $40. During the month, fixed costs were $16,800 and variable costs were 75% of sales.

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		$
Contribution margin per unit		$
Contribution margin ratio			%

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

Break-even point		$
Break-even point			units

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Compute the margin of safety in dollars and as a ratio.

Margin of safety		$
Margin of safety ratio			%

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Answer 1