Calculate the contribution margin


Problem: Dependable Drivers Driving School charges $250 per student to prepare and administer written and driving tests. Variable costs of $100 per student include trainers' wages, study materials, and gasoline. Annual fixed costs of $75,000 include the training facility and fleet of cars.

Requirements:

1. For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units by first referring to the original data provided:

a. Breakeven point with no change in information.

b. Decrease sales price to $220 per student.

c. Decrease variable costs to $50 per student.

d. Decrease fixed costs to $60,000.

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Accounting Basics: Calculate the contribution margin
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