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A spa offers three membership programs platinum,gold and silver. The spa incurs annual fixed costs of $19,200,000. Platinum Gold Silver Memberships sold 30,000 150,000 120,000
A spa offers three membership programs platinum,gold and silver. The spa incurs annual fixed costs of $19,200,000.
Platinum Gold Silver
Memberships sold 30,000 150,000 120,000
Membership price 2,500 1,000 800
Variable cost per membership 1,000 500 200
- What is the weighted average unit contribution margin?
- Assuming the sales of mix memberships remains constant, what is the total number of memberships that the company must sell to break even?
- What is the break even point (in memberships) for the gold company?
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