Robert Williams 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, Robert provides a towel, a bottle of water, and an after-workout protein shake to each person participating in a class, at a cost of $1.77 per person. Robert employs four part-time instructors and pays them each $1,200 per month. He also pays himself a monthly salary of $5,700. Robert's other monthly costs are $1,700 for rent. $1.350 for depreciation on his 32 bikes, and $1,450 in utilities and insurance. (a) What is Robert's contribution margin per unit? (Round answer to 2 decimal places, eg 52.75) Contribution margin $ per unit (b) What is Robert's contribution margin ratio? (Round answer to 2 decimal places, eg. 52.75) Contribution margin ratio (c) Prepare Robert's monthly contribution format income statement. Assume that he teaches 4.200 clients. (Round per unit values to 2 decimal places, eg 52.75 and all other answers to O decimal places, eg 1.234)
Robert Williams 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, Robert provides a towel, a bottle of water, and an after-workout protein shake to each person participating in a class, at a cost of $1.77 per person. Robert employs four part-time instructors and pays them each $1,200 per month. He also pays himself a monthly salary of $5,700. Robert's other monthly costs are $1,700 for rent. $1.350 for depreciation on his 32 bikes, and $1,450 in utilities and insurance. (a) What is Robert's contribution margin per unit? (Round answer to 2 decimal places, eg 52.75) Contribution margin $ per unit (b) What is Robert's contribution margin ratio? (Round answer to 2 decimal places, eg. 52.75) Contribution margin ratio (c) Prepare Robert's monthly contribution format income statement. Assume that he teaches 4.200 clients. (Round per unit values to 2 decimal places, eg 52.75 and all other answers to O decimal places, eg 1.234)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Robert Williams 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, Robert provides a towel, a bottle of water, and an after-workout protein shake to
each person participating in a class, at a cost of $1.77 per person. Robert employs four part-time instructors and pays them each
$1,200 per month. He also pays himself a monthly salary of $5,700. Robert's other monthly costs are $1,700 for rent. $1,350 for
depreciation on his 32 bikes, and $1,450 in utilities and insurance.
(a) What is Robert's contribution margin per unit? (Round answer to 2 decimal places, eg. 52.75)
Contribution margin $
per unit
(b) What is Robert's contribution margin ratio? (Round answer to 2 decimal places, eg. 52.75)
Contribution margin ratio
%
(c) Prepare Robert's monthly contribution format income statement. Assume that he teaches 4.200 clients. (Round per unit values to 2
decimal places, eg 52.75 and all other answers to O decimal places, eg 1.234)
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