Handy’s Contribution Margin Assignment | Top Universities

Sherri’s Tan-O-Rama is a local tanning salon. The following information reflects its number of appointments and total costs for the first half of the year:

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Month Number of Appointments Total Cost
January 500 $ 6,800
February 300 5,000
March 275 5,450
April 475 6,050
May 200 5,600
June 250 5,000

Using the high-low method, calculate the total fixed cost per month and the variable cost per tanning appointment. (Round your “Variable Cost per Unit” answer to 2 decimal places and “Fixed Cost” answer to the nearest dollar amount.)

Handy’s Hats makes the world’s best hats. Information for the last eight months follows:

Month Number of Hats Produced Total Cost
January 6,750 11,300
February 5,540 10,200
March 6,250 10,900
April 3,500 7,100
May 8,500 12,100
June 3,950 8,200
July 3,900 8,100
August 4,690 9,350

Suppose that Handy’s expects to sell 5,300 hats during the month of September and that each hat sells for $2.75.

Handy performed a least-squares regression and obtained the following results:

Intercept 4,321.12
X Variable 1 0.99

Prepare Handy’s contribution margin income statement for the month of September. (Round your answers to 2 decimal places.) Get Accounting Homework Help Today

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