ACC 560 MART Education Terms/acc560mart.com ACC 560 MART Education Terms/acc560mart.com | Page 22
D. Prepare a CVP income statement for the break-even point that
shows both total and per unit amounts.
E6-2
In the month of June, Jose Hebert's Beauty Salon gave 4,000
haircuts, shampoos, and permanents at an average price of $30.
During the month, fixed costs were $16,800 and variable costs were
75% of sales.
Instructions
A. Determine the contribution margin in dollars, per unit and as a
ratio.
B. Using the contribution margin technique, compute the break-even
point in dollars and in units.
C. Compute the margin of safety in dollars and as a ratio.
E6-7
PDQ Repairs has 200 auto-maintenance service outlets nationwide. It
performs primarily two lines of service: oil changes and brake repair.
Oil change–related services represent 70% of its sales and provide a
contribution margin ratio of 20%. Brake repair represents 30% of its
sales and provides a 40% contribution margin ratio. The company's
fixed costs are $15,600,000 (that is, $78,000 per service outlet).
Instructions
A. Calculate the dollar amount of each type of service that the
company must provide in order
B. The company has a desired net income of $52,000 per service outlet.
What is the dollar amount of each type of service that must be