Question
Use the following information for the next 3 questions. Metro Health & Spa offers three membership programs: Platinum, Gold and Silver.Metro incurs annual fixed costs
Use the following information for the next 3 questions.
Metro Health & Spa offers three membership programs: Platinum, Gold and Silver.Metro incurs annual fixed costs of $19,200,000.
Additional information about the programs is presented below:
Platinum
Gold
Silver
Memberships sold
30,000
150,000
120,000
Membership price
$2,500
$1,000
$800
Variable cost per membership
$1,000
$500
$200
1.What is the weighted-average unit contribution margin?
2.Assuming that the sales mix of memberships remains constant, what is thetotal number of membershipsthat the company must sell to break even?
3.What is the break-even point (in memberships) for the"Gold"membership?
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