Question

Assuming that a local cost cutter provides cuts perms and hair styling service and you fix cost are $120,000 in the variable cost or 40% of the sales revenue last year’s revenue total of $250,000. What is the break even points in sales dollars?

Answer 1

Unit selling price

$7 $9 $7

Unit variable costs

(4) (5) (1)

Unit contribution margin

$3, $4, $6

With monthly fixed costs of $306,000, the company sells two units of A for each unit of B and three units of B for each unit of C.