Question

c.3939 d. 15757 Question 5 Not yet answered Marked out of 1.00 Johnson Inc. manufactures high end hockey sticks. The selling price per stick is $154.42 and the variable cost per stick is S9486·The sales volume of S1 582191 is necessary to produce an operating incom e of S211338. What are Johnson's total fixed costs? F Flag questionSelect one a. $2342791 b. $782076 C. $398915 d. $211338 MacBook Air F12 FIV F10

Answer 1

Solution:

The correct answer is Option(C). $398,915.

Contribution margin = Sales - Variable expenses

= ($154.42 - $94.86)

= $59.56 per stick

Contribution margin ratio = Contribution margin / Sales

= ($59.56 / $154.42)

= 0.385701334

Total Contribution margin = (0.385701334 * $1,582,191)

= $610,253.1793809

Operating income = Contribution margin - Fixed costs

Fixed costs = ($610,253.1793809 - $211,338)

= $398,915.1793809 (Or) $398,915.