Answer:
<em>Part 1. total contribution margin in dollars</em>
Total Contribution Margin = $37,800
<em>Part 2. per unit contribution margin</em>
contribution margin per unit of sell = $ 60
<em>Part 3. contribution margin ratio</em>
contribution margin ratio = 50 %
<em>Part 4. break-even point in dollars</em>
break-even point in dollars = $ 52,320
<em>Part 5. break-even point in units</em>
break-even point in units = 436 clients
Explanation:
<em>Part 1. total contribution margin in dollars</em>
contribution margin per unit of sell = Sales Price × 50%
= $120 × 50%
= $ 60
Total Contribution Margin = Number of Clients × Contribution Margin per unit
= 630 × $60
= $37,800
<em>Part 2. per unit contribution margin</em>
contribution margin per unit of sell = Sales Price × 50%
= $120 × 50%
= $ 60
<em>Part 3. contribution margin ratio</em>
contribution margin ratio = Contribution / Sales
= $ 60/ $ 120
= 50 %
<em>Part 4. break-even point in dollars</em>
break-even point in dollars = Fixed Costs / contribution margin ratio
= $26,160 / 0.50
= $ 52,320
<em>Part 5. break-even point in units</em>
break-even point in units = Fixed Costs / contribution per unit
= $26,160 / $60
= 436 clients
