Question

Contribution Margin Ratio a. Yountz Company budgets sales of $2,400,000, fixed costs of $525,000, and variable costs of $1,560,000. What is the contribution margin ratio for Yountz Company? (Enter your answer as a whole number.) b. If the contribution margin ratio for Vera Company is 40%, sales were $3,400,000, and fixed costs were $800,000, what was the income from operations?

Answer 1

a sales - $2400,000 -variable costs $1560,000 fixed costs: $525,ooo. contribution margin ratio is difference blw a company's sales and variable expenses, expressed as percentage Ratio = sales variable costs sales 2400,oou - 1560,000 2400,000 F 35 % contr. b) Margin ratio – 40%. sales : $3400,000 fixed costs – $800,000 Here we need to calculate variable expenses. variable . 0.40 3400,000 - corts 3400,000 variable – $2040,000: Cost Income - Revenue - Total costs. 3400,000 - 1 800,000 + 2040,000) $ 560,000