Sherris TanORama is a local tanning salon Its regression out

Sherri\'s Tan-O-Rama is a local tanning salon. Its regression output is as follows: Intercept X Variable 1 4,611.35 3.50 Suppose that the company charges $9.60 per tanning session. Calculate the unit contribution margin. Calculate contribution margin ratio Round your contribution margin ratio percentage to two decimal places ie .1234 should be entered as 12.34% Contribution Margin Ratio

Solution

Answer

unit contribution margin = sale price - variable cost

= 9.60 - 3.50

= 6.10

contribution margin ratio = 6.10 / 9.60

= 63.54 %

total contribution = 1350 * 6.10

= 8235