Computing the contribution margin in dollars

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Reference no: EM13150101

In the month of June, Paula's Beauty Salon gave 3,500 haircuts, shampoos, and permanents at an average price of \$30. During the month, fixed costs were \$16,800 and variable costs were 80% 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.

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