Cut This and That provides special-occasion haircuts and generates average revenue of $61 per customer. The salon’s fixed costs are $38,000 per year, which include rent, utilities and magazine subscriptions. Its variable costs are $30.50 per customer. Target operating income for the year is $88,000.
Do not enter dollar signs or commas in the input boxes.
a) Calculate the revenues needed to obtain the target operating income.
Round the Contribution Margin ratio to 2 decimal places. Round all other answers to the nearest whole number.
CM ratio: Answer
50
%
Total CM: $Answer
Revenue: $Answer
