Question
Anthony Herrera recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $5.85 per person. To differentiate his gym and
Anthony Herrera recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $5.85 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 $1.78 per person. Anthony employs three part-time instructors and pays them each $1,266 per month. He also pays himself a monthly salary of $4,078. Anthonys other monthly costs are $1,628 for rent, $1,302 for depreciation on his 34 bikes, and $1,826 in utilities and insurance. Required a. What is Anthony's contribution margin per unit? b. What is Anthony's contribution margin ratio? c. Prepare Anthonys monthly contribution format income statement assuming he teaches 5,270 clients.
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