Trevor's Grout Company produces and sells grout to clients so they can install tile in their...
Trevor's Grout Company produces and sells grout to clients so they can install tile in their new homes. Trevor has supplied the following data about his grout company:
| Kilograms (of grout) produced and sold | 340,000 | |
| Sales revenue | $ | 1,910,000 |
| Variable manufacturing expense | $ | 956,000 |
| Fixed manufacturing expense | $ | 258,000 |
| Variable selling and administrative expense | $ | 363,000 |
| Fixed selling and administrative expense | $ | 224,000 |
| Net operating income | $ | 109,000 |
Trevor's Grout Company's contribution margin ratio is closest to:
Garrison 16e Rechecks 2018-06-19
Multiple Choice
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81.0%
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30.9%
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74.8%
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49.9%
Homework Answers
Variable costs = 956,000+363,000 = 1,319,000
Contribution margin ratio
= (Sales revenue - Variable costs)/Sales revenue
= (1,910,000-1,319,000)/1,910,000
= 30.9%
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