Concept explainers
In the month of June, Jose Hebert’s Beauty Salon gave 4,000 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $16,800 and variable costs were 75% of sales.
Instructions
(a) Determine the contribution margin in dollars, per unit and as a ratio.
(b) Using the contribution margin technique, compute the break-even point in dollars and in units.
(c) Compute the margin of safety in dollars and as a ratio.
Want to see the full answer?
Check out a sample textbook solutionChapter 6 Solutions
Managerial Accounting: Tools for Business Decision Making 7e Binder Ready Version + WileyPLUS Registration Card
Additional Business Textbook Solutions
Intermediate Accounting
Financial Accounting
Principles of Accounting Volume 1
Horngren's Accounting (12th Edition)
Financial Accounting (11th Edition)
Financial Accounting (12th Edition) (What's New in Accounting)
- In the month of June, Jose Hebert’s Beauty Salon gave 3,500 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $16,500 and variable costs were 75% of sales. Determine the contribution margin in dollars, per unit and as a ratio. (Round contribution margin per unit and contribution margin ratio to 2 decimal places, e.g. 5.25 & 10.50.) Contribution margin $ Contribution margin per unit $ Contribution margin ratio % Using the contribution margin technique, compute the break-even point in dollars and in units. (Round answers to 0 decimal places, e.g. 1,225.) Break-even point $ Break-even point units Compute the margin of safety in dollars and as a ratio. (Round answers to 0 decimal places, e.g. 1,225.) Margin of safety $ Margin of safety ratio %arrow_forwardIn the month of June, Sunland Hebert’s Beauty Salon gave 4,000 haircuts, shampoos, and hair colorings at an average price of $50. During the month, fixed costs were $16,000 and variable costs were 75% of sales. Determine the contribution margin in dollars, per unit and as ratio Using the contribution margin technique, compute the break-even point in dollars and in units. Compute the margin of safety in dollars and as a ratio.arrow_forwardIn the month of August, Beauty Salon services 560 clients at an average price of $120. During the month, fixed costs were $21,024 and variable costs were 60% of sales. Determine the total contribution margin in dollars, the per unit contribution margin, and the contribution margin ratio. Contribution margin in dollars? Contribution margin per unit? Contribution margin ratio? Using the contribution margin technique, compute the break-even point in dollars and in units. Break-even sales? (in dollars) Break-even sales? (in units)arrow_forward
- In June, Wildhorse Salon gave 3,500 haircuts, shampoos, and permanents at an average price of $ 50. During the month, fixed costs were $ 31,000 and variable costs were 80% of sales. Determine the contribution margin in dollars, per unit, and as a ratio. (Round per unit value to 2 decimal places, e.g. 52.75 and final answer to 0 decimal places, e.g. 5,275.) Contribution margin (in dollars) 2$ Contribution margin (per unit) Contribution margin (ratio) % Using the contribution margin technique, compute the break-even sales dollars and sales units. Break-even sales dollars $ Break-even sales units units Compute the margin of safety dollars and as a ratio. (Round answers to 0 decimal places, e.g. 5,275.) Margin of safety in dollars $ Margin of safety ratio %24arrow_forwardIn the month of March, Pharoah Salon services 630 clients at an average price of $100. During the month, fixed costs were $14,880 and variable costs were 68% of sales. (A) Determine the total contribution margin in dollars, the per unit contribution margin, and the contribution margin ratio. Contribution margin in dollars $ Contribution margin per unit $ Contribution margin ratio % (B) Using the contribution margin technique, compute the break-even point in dollars and in units. Break-even sales $ Break-even sales unitsarrow_forwardIn the month of September, Matiock Industries sold 800 units of product. The average sales price was $30. During the month, fixed costs were $6,300 and variable costs were 70% of sales. Instructions (a) Determine the contribution margin in dollars, per unit, and as a ratio. (b) Using the contribution margir technique, compute the break-even point in dollars and in units.arrow_forward
- In the month of September, Nixon Company sold 800 units of product. The average sales price was $30. During the month, fixed costs were $7,200 and variable costs were 60% of sales.1. Determine the contribution margin in dollars 2. Determine the contribution margin per unit 3. Determine the contribution margin ratio. 4. Using the contribution margin technique, compute the break-even point in dollars 5. Using the contribution margin technique, compute the break-even point in units.arrow_forwardIn the month of June, Jose Hebert's Beauty Salon gave 3,800 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $16,900 and variable costs were 75% of sales. Contribution margin $ Contribution margin per unitarrow_forwardDuring the month of September, Chase's Barbershop engaged with 590 clients at an average price of $200. During the month, fixed costs were $26,536 and variable costs were 69% of sales. (Do not use commas or dollar signs in your responses.) Contribution margin in dollars $ Contribution margin per unit $ Contribution margin ratioarrow_forward
- In the month of March, Style Salon services 560 clients at an average price of $ 120. During the month, fixed costs were $ 21,024 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 $ Contribution margin per unit $ Contribution margin ratio %arrow_forwardLast month Annie's Homemade total sales and variable costs for 6-ounce servings were $18,000 and $4,500, respectively. Its total sales and variable costs for 8-ounce servings were $7,000 and $1,750, respectively. Its total fixed costs for the month were $11,000. Required: 1. What was last month's overall contribution margin ratio? 2. Using last month's data, what is the company's overall break-even point in dollar sales? Note: Round up to the nearest whole dollar. Complete this question by entering your answers in the tabs below. Required 1 Required 2 What was last month's overall contribution margin ratio? The overall contribution margin ratio was %arrow_forwardIn the month of September, Nixon Company sold 800 units of product. The average sales price was $30. During the month, fixed costs were $7,200 and variable costs were 60% of sales. 4. Using the contribution margin technique, compute the break-even point in dollars 5. Using the contribution margin technique, compute the break-even point in unitsarrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College