Problem
In the month of June, Jose Hebert's Beauty Salon gave 4,500 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.
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.