Select your language

Suggested languages for you:
Log In Start studying!
Answers without the blur. Just sign up for free and you're in → Illustration


Horngren'S Financial And Managerial Accounting
Found in: Page 1161

Short Answer

Question: Chaney Company provides lawn care services. Following are data for a recent week:

Service Revenue $1,300

Variable Costs $780

Contribution Margin $520 Chaney provided service to 25 customers during the week. Determine the average amount the company charged each customer, the variable cost per customer, and the contribution margin ratio.


The average service price is $52, the variable cost per unit is $31.20, and the contribution margin ratio is 40%.

See the step by step solution

Step by Step Solution

Step 1: Calculation of the average amount the company charged each customer

Average service price = Service Revenue/No. of customers



Step 2: Calculation of variable cost per customer

Variable cost per customer = Variable cost/No. of customers



Step 3: Profitability analysis based on contribution margin ratio



Net sales revenue


Less: Variable cost


Contribution Margin


Contribution margin ratio (Contribution margin/net sales revenue)


Most popular questions for Business-studies Textbooks


Want to see more solutions like these?

Sign up for free to discover our expert answers
Get Started - It’s free

Recommended explanations on Business-studies Textbooks

94% of StudySmarter users get better grades.

Sign up for free
94% of StudySmarter users get better grades.