Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Richard Miller recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $10 per person. To differentiate his gym and

image text in transcribed
Richard Miller 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, Richard provides a towel, a bottle of water, and an after-workout protein shake to each person participating in a class, at a cost of $1.81 per person. Richard employs four part-time instructors and pays them each $1,600 per month. He also pays himself a monthly salary of $6,100. Richard's other monthly costs are $2,100 for rent, $1,550 for depreciation on his 30 bikes, and $1,550 in utilities and insurance. (a) What is Richard's contribution margin per unit? (Round answer to 2 decimal places, eg. 52.75.) Contribution margin $ per unit (b) What is Richard's contribution margin ratio? (Round answer to 2 decimal places, eg. 52.75) Contribution margin ratio

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

Auditing and Assurance Services

Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws

6th edition

978-1259197109, 77632281, 77862341, 1259197107, 9780077632281, 978-0077862343

More Books

Students also viewed these Accounting questions

Question

What are the attributes of a technical decision?

Answered: 1 week ago

Question

How do the two components of this theory work together?

Answered: 1 week ago

Question

List at least three advantages to using a consultant.

Answered: 1 week ago