Sarah Martinez opened a yoga studio where she charges $7.50 per class per person. For each participant, she provides a yoga mat rental and a herbal tea at a cost of $3.25 per person. Sarah employs two part-time yoga instructors at $1,450 per month each. She pays herself a monthly salary of $3,800. Other monthly fixed costs include $2,200 for rent, $1,100 for equipment depreciation, and $1,600 for utilities and insurance. A. What is Sarah's contribution margin per unit? B. What is Sarah's contribution margin ratio?
Sarah Martinez opened a yoga studio where she charges $7.50 per class per person. For each participant, she provides a yoga mat rental and a herbal tea at a cost of $3.25 per person. Sarah employs two part-time yoga instructors at $1,450 per month each. She pays herself a monthly salary of $3,800. Other monthly fixed costs include $2,200 for rent, $1,100 for equipment depreciation, and $1,600 for utilities and insurance. A. What is Sarah's contribution margin per unit? B. What is Sarah's contribution margin ratio?
Chapter5: Introduction To Business Expenses
Section: Chapter Questions
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Transcribed Image Text:Sarah Martinez opened a yoga studio where she charges $7.50 per class
per person. For each participant, she provides a yoga mat rental and a
herbal tea at a cost of $3.25 per person. Sarah employs two part-time
yoga instructors at $1,450 per month each. She pays herself a monthly
salary of $3,800. Other monthly fixed costs include $2,200 for rent,
$1,100 for equipment depreciation, and $1,600 for utilities and
insurance.
A. What is Sarah's contribution margin per unit?
B. What is Sarah's contribution margin ratio?
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