Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

for C) please with explanation Charles Wilson recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $10 per person.

for C) please with explanation image text in transcribed
image text in transcribed
image text in transcribed
Charles Wilson recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $10 per person. To differentiate his gym and better serve his clients, Charles provides a towel, a bottle of water, and an after-workout protein shake to each person participating in a class, at a cost of $ 1.82 per person. Charles employs four part-time instructors and pays them each $ 1,700 per month. He also pays himself a monthly salary of $ 6,200. Charles's other monthly costs are $ 2.200 for rent, $ 1.600 for depreciation on his 34 bikes, and $ 1.575 in utilities and insurance. (a) What is Charles's contribution margin per unit? (Round answer to 2 decimal places, eg 52.75.) Contribution margins 8.18 per unit (b) What is Charles's contribution margin ratio? (Round answer to 2 decimal places, s. 52.75.) Contribution margin ratio 818 (c) Prepare Charles's monthly contribution format income statement. Assume that he teaches 4.700 dients (Round per unit values to 2 decimal places, e.g. 52.75 and all other answers to decimal places, es 1,234) el Prepare Charles's monthly contribution format income statement. Anume that he teaches 4.700 dients. Round per unit votues to 2 decimal places 52.75 and all other answers to decimal plane 120 Per Unit Sales 000 1000 Expenses Towel Water Colon Marin HERE Detection 1600 iretructors 200 Contribution Margin 38446 $ Food Expenses Depreciation Expense 1600 Instructor salaries Expense v 6200 Rent Expense 2200 Utilities fe insurance Expense 1575 Management Salary Expense 6500 Total Fixed Expenses Operating Income

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: John Wild, Ken Shaw, Barbara Chiappetta

8th Edition

1264111924, 9781264111923

More Books

Students also viewed these Accounting questions

Question

Describe alternative paid time off policies.

Answered: 1 week ago

Question

Describe customized benefit plans.

Answered: 1 week ago