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Calculate the contribution margin ratio

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Reference no: EM132465323

Use the information below to answer the questions:

Rent:               $1,800 for 2500 sq ft

Utilities:           $400 a month

Equipment:      $12,000

Employees:     $2,500 a month for a trainer (25 an hour)

Insurance:      $200

Total:            $16,900

Question 1: Classify your costs using the following categories: Variable costs and Fixed Costs

Question 2: Determine the amount you will charge for each "unit" of service. For this assignment, keep things simple and just provide one type of service. Show your calculations.

Question 3: Estimate the dollar amount of your variable costs and the dollar amount of your fixed costs for the first year of operations.

Question 4: Calculate the contribution margin ratio. Show your calculations.

Question 5: Calculate your breakeven point in terms of total revenues necessary to breakeven. Show your calculations.

Question 6: If your breakeven point is not viable, then make changes to your business plan so that your revenues and costs will result in a sufficiently reasonable breakeven point. Discuss the issues with breakeven.

Reference no: EM132465323

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