In the month of June, Angela'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.
Required:
1. Determine the contribution margin in dollars, per unit, and as a ratio:
2. Using the contribution margin technique, compute the break-even point in dollars and in units:
3. Compute the margin of safety in dollars and as a ratio: