In the month of March, New Day Spa services 570
clients at an average price of $120. During the month, fixed costs were $21,000
and variable cost were 65% of sales. a. Determine the contribution margin in
dollars, per unit, and as a ratio. b. Using contribution margin technique,
compute the break-even point in dollars and in units.
SOLUTION PREVIEW
a.
Service revenue =
570 x $120
= $68,400
Variable cost =
65% of Sales
