Calculate the contribution margin and break-even point.

In the month of June, New Day Spa served 560 clients at an average price of $120. During the month, fixed costs were $21,024 and variable costs were 60% of sales.

Instructions

(a)Determine the contribution margin in dollars, per unit, and as a ratio.

(b)Using the contribution margin technique, calculate the break-even point in dollars and in units.