Preparing Contribution Income Statement and Computing Contribution Margin Ratio Assume Strands Salon, a San Diego...
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Preparing Contribution Income Statement and Computing Contribution Margin Ratio Assume Strands Salon, a San Diego hair salon, provides haircuts for $60. Annual fixed costs are $672,000 and the compan estimates $15.30 in variable costs per haircut. REQUIRED a. Prepare a contribution income statement for the following year assuming the company forecasts that it will provide 25,200 haircuts. b. Compute the contribution margin ratio. - Note: Enter the percent rounded to one digit after the decimal; for example, enter 8.4 for 8.44%, or 8.5 for 8.45%. % c. How does your answer to part b change if fixed costs are expected to increase by 10% and variable cost per unit are expected to increase by $2.34 per haircut? -Note: Enter the percent rounded to one digit after the decimal; for example, enter 8.4 for 8.44%, or 8.5 for 8.45%. Contribution margin ratio: %
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Preparing Contribution Income Statement and Computing Contribution Margin Ratio Assume Strands Salon, a San Diego hair salon, provides haircuts for $60. Annual fixed costs are $672,000 and the compan estimates $15.30 in variable costs per haircut. REQUIRED a. Prepare a contribution income statement for the following year assuming the company forecasts that it will provide 25,200 haircuts. b. Compute the contribution margin ratio. - Note: Enter the percent rounded to one digit after the decimal; for example, enter 8.4 for 8.44%, or 8.5 for 8.45%. % c. How does your answer to part b change if fixed costs are expected to increase by 10% and variable cost per unit are expected to increase by $2.34 per haircut? -Note: Enter the percent rounded to one digit after the decimal; for example, enter 8.4 for 8.44%, or 8.5 for 8.45%. Contribution margin ratio: % 