Sherri’s Tan-O-Rama is a local tanning salon. Its regression output is as follows: Coefficients Intercept 4,630.34 X Variable 1 2.33 Suppose that the company charges $7.20 per tanning session. Required: 1. Calculate the unit contribution margin.2. Calculate contribution margin ratio.3. Calculate the total contribution margin if the shop books 1,400 tanning sessions this month.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Sherri’s Tan-O-Rama is a local tanning salon. Its regression output is as follows:
| Coefficients | |
| Intercept | 4,630.34 |
| X Variable 1 | 2.33 |
Suppose that the company charges $7.20 per tanning session.
Required:
1. Calculate the unit contribution margin.
2. Calculate contribution margin ratio.
3. Calculate the total contribution margin if the shop books 1,400 tanning sessions this month.
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