Question
Anthony Herrera recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $5.23 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 $5.23 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 $2.24 per person. Anthony employs three part-time instructors and pays them each $1,256 per month. He also pays himself a monthly salary of $4,482. Anthonys other monthly costs are $1,564 for rent, $1,414 for depreciation on his 34 bikes, and $1,870 in utilities and insurance.
(a) What is Anthonys contribution margin per unit? (Round answer to 2 decimal places, e.g. 52.75.)
Contribution margin | $ | per unit |
(b) What is Anthonys contribution margin ratio? (Round answer to 2 decimal places, e.g. 52.75.)
Contribution margin ratio | % |
(c) Prepare Anthonys monthly contribution format income statement assuming he teaches 5,219 clients. (Round per unit values to 2 decimal places, e.g. 52.75 and all other answers to 0 decimal places, e.g. 5,275.)
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