Question

Question 3 OrioleTot sells a learning system that helps preschool and elementary students learn basic math facts and concepts. The company's income statement from last month is as follows: Total Per Unit $55 Sales revenue Variable expenses Contribution margin Fixed expenses Operating income $819,500 327,800 491,700 270,000 $ 221,700 22.00 $33.00 (a) * Your answer is incorrect. Try again. What is OrioleTot's contribution margin ratio? Its variable cost ratio? (Round ratios to 2 percentage places, e.g. 0.38 = 38%.) Contribution margin ratio Variable cost ratio

Answer 1

Contribution margin ratio = Contribution margin / Sales

= $491,700 / $819,500

= 60%

Variable cost ratio = Variable expenses / Sales Revenue

= $327,800 / $819,500

= 40%