Commecial Residential Total Number of Customers 200 600 800 Service Revenue $ 32,000 $72,000 $ 104,000 Variable Costs 8320 27,360 35,680 Contribution Margin 23,680 44,640 68,320 Fixed Costs 53,000 Operating Income $ 15,320
Commecial Residential Total Number of Customers 200 600 800 Service Revenue $ 32,000 $72,000 $ 104,000 Variable Costs 8320 27,360 35,680 Contribution Margin 23,680 44,640 68,320 Fixed Costs 53,000 Operating Income $ 15,320
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Analyzing profitability analysis, service company
Burlington Internet Services is an Internet service provider for commercial and residential Customers. The company provided the following data for its two types of customers for the month of August:
For each type of customer, determine both the contribution margin per customer and the contribution margin ratio. Round to twos decimal places. Which type of service and more profitable?
Transcribed Image Text:Commecial
Residential
Total
Number of Customers
200
600
800
Service Revenue
$ 32,000
$72,000
$ 104,000
Variable Costs
8320
27,360
35,680
Contribution Margin
23,680
44,640
68,320
Fixed Costs
53,000
Operating Income
$ 15,320
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