Sherri’s Tan-O-Rama is a local tanning salon. Its regression output is as follows: Coefficients Intercept 4,649.75 X Variable 1 2.12 Suppose that the company charges $7.40 per tanning session. Required: 1. Calculate the unit contribution margin. 2. Calculate contribution margin ratio. 3. Calculate the total
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Sherri’s Tan-O-Rama is a local tanning salon. Its regression output is as follows:
| Coefficients | |
| Intercept | 4,649.75 |
| X Variable 1 | 2.12 |
Suppose that the company charges $7.40 per tanning session.
Required:
1. Calculate the unit contribution margin.
2. Calculate contribution margin ratio.
3. Calculate the total contribution margin if the shop books 1,000 tanning sessions this month.
1.Unit Contribution Margin = Sale Price - Variable Cost
= $7.40 - $2.12
= $5.28
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