Question

Fill in the blanks for each of the following independent cases. (Click the icon to view the cases.) (For entries with a $0 balance, make sure to enter "0" in the appropriate cell. Round the contribution margin percentage to the nearest whole percent.) Variable Fixed Total Operating Contribution Case Revenues Costs Costs Costs Income Margin Percentage a. D $ 800 $ 1,000 $ 1,700 b. $ 2,200 $ 200 $ 200 c. $ 700 $ 500 $ 700 % d. $ 1,200 $ 200 C D 25 %

Answer 1

Case	Revenues	Variable costs	Fixed costs	Total costs	Operating income	Contribution margin percentage
a.	$2,700	$800	$200	$1,000	$1,700	70%
b.	$2,200	$1,800	$200	$2,000	$200	18%
c.	$700	$500	$200	$700	$0	29%
d.	$1,200	$900	$200	$1,100	$100	25%

a. Fixed costs = Total costs - Variable cost

= $1,000 - $800

= $200

Revenues = Total costs + Operating income

= $1,000 + $1,700

= $2,700

Contribution margin percentage = (Revenues - Variable cost) / Revenues  

= $1,900 / $2,700

= 70%

b.

Total costs = Revenues - operating income

= $2,200 - $200

= $2,000

Variable costs = Total costs - Fixed costs

= $2,000 - $200

= $1,800

Contribution margin percentage = $400 / $2,200

= 18%

c.

Fixed costs = $700 - $500

= $200

Operating income = $700 - $700

= $0

Contribution margin percentage = $200 / $700

= 29%

d.

Variable costs = (100% - 25%) * 1200

= $900

Total costs = Fixed costs + Variable costs

= $200 + $900

= $1,100

Operating income = $1,200 - $1,100

= $100