Calculating Annual Contribution per Customer and Required

For solving the required question above, I would break this up into multiple steps. First I look for annual contribution per customer,Contribution margin ratio = 1 - variable cost ratio The contribution margin can be stated on a gross or per unit basis. The contribution margin is computed as the selling price per unit, minus the variable cost per unit (Estevez & Overcast , 2022). Contribution margin ratio = 1-0.60 Contribution margin ratio = 0.40 Next I would break everything down by average sale per customer, average contribution per customer, number of weekly visits and annual contribution per customer; CalculationAmount Average sale per customer$10 Average contribution per customer$10 x 0.40 =$4 No. of weekly visits2 Weekly contribution per customer$4 x 2$8 Annual contribution per customer$8 x 52 weeks$416 I would then look for the number of customers required for desired profit = Fixed cost+profit/Annual contribution per customer Customers required for desired profit = ($ 125,000 + $ 75,000) / $ 416 Customers required for desired profit = $ 200,000 / $ 416 Customers required for desired profit = 480.76 = 481 Lastly the required population equation, which is Required customers/Customers as portion of city population Required population = 481/0.05 Required population = 9,620 References: Easton, P. D., Halsey, R. F., & McAnally, M. L. (2021).Financial & Managerial Accounting for mbas(6th ed.). Cambridge Business Publishers. Estevez, E., & Overcast , K. (2022, October 8).Contribution margin: Definition, overview, and how to calculate. Investopedia. Retrieved March 31, 2023, from https://www.investopedia.com/terms/c/contributionmargin.asp