Lauras Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Lauras offers 15-minute haircuts for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules her 5 employees based on expected client traffic. Each of the employees is paid $ 1270 per month, with part of their pay coming from client tips. Laura pays rent and overhead costs of $ 2200 per month on the facility. Because of the quick nature of the service, Laura doesnt have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $ 0.70 each. She also provides shampoo and conditioner for each client at a cost of $ 1.10 per client. The average price for a haircut is $ 15. Laura pays herself $ 5300 per month. What is Lauras contribution margin ratio?

12.0%

88.0%

84.8%

12.3%