ACC$1103-$ Managerial Accounting

Ch$.5$ Cost$-$Volume$-$Profit Relationships

EXERCISE $5\mathrm{.}1.$ Anthony Herrera recently fulfilled his long$-$time dream of opening a gym that offers spinning exercise classes for $$5$ per person. To differentiate his gym and better serve his clients, Anthony provides a towel, a bottle of water, and an after$-$workout protein shake to each person participating in a class, at a cost of $$1\mathrm{.}75$ per person. Anthony employs three part$-$time instructors and pays them each $$1,000$ per month. He also pays himself a monthly salary of $$4,000.$ Anthony's other monthly costs are $$1,500$ for rent, $$1,250$ for depreciation on his $30$ bikes, and $$1,800$ in utilities and insurance. Required

a$.$ What is Anthony's contribution margin per unit?

b$.$ What is Anthony's contribution margin ratio?

c$.$ Prepare Anthony's monthly contribution format income statement assuming he teaches $5,000$ clients.

$\backslash$table$[[,,],[,,],[,,],[,,],[,,],[,,],[,,],[,,],[,,]]$