Anthony Herrera recently fulfilled his long-time dream of opening a gym that offers spinning exercise classes for $10 per person. To differentiate his gym and better serve his clients, Anthony provides a towel, a bottle of water, and an after-workout protein shake to each person participating in a class, at a cost of $2.65 per person. Anthony employs four part-time instructors and pays them each $1,500 per month. He also pays himself a monthly salary of $6,500. Anthony’s other monthly costs are $1,800 for rent, $1,350 for depreciation on his 30 bikes, and $1,425 in utilities and insurance.
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a. What is Anthony’s contribution margin per unit?
b. What is Anthony’s contribution margin ratio?
c. Prepare Anthony’s monthly contribution format income statement. Assume that he teaches 4,500 clients.