Question
JEHAN Associates runs a health spa where customers come for the day to be pampered. They charge $500 for a day. They estimate that the
JEHAN Associates runs a health spa where customers come for the day to be pampered. They charge $500 for a day.
They estimate that the variable costs associated with a visit are $275. Furthermore, they estimate fixed costs of $24,750.
1) The contribution margin per unit is $_____
2) The breakeven point in units is: _____ visits
3) The breakeven sales volume in dollars is:
4) Let's say that they would like to make a profit of $20,250. How many daily visits to they need to schedule? _____ visits
5) Let's say that 250 visits are planned for next year. How much profit will they expect to make?
6) They are thinking of changing the way they do certain things at the spa. This will result in a $3,000 increase in fixed costs and will SAVE them $15 of variable costs per visitor. What do you think - should the company do this? Yes or No? and by how much? (how much better is your answer than the other choice)?
Please answer 1-6! will give like!!!!
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