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Koninklijke BolsWessanen NV has a fixed cost of $300000 and a variable cost percentage of 80%....

Koninklijke BolsWessanen NV has a fixed cost of $300000 and a variable cost percentage of 80%. The company earns Net profit of $84000 in 2005. The income tax rate is 40%...... Calculate 1) Operating profit.......... 2) contribution margin...... 3) total revenues........4) Breakeven revenues

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Answer #1

1) Operating profit--$140000

2) Contribution margin --$440000

3) Total revenues--$ 2200000

4) Breakeven revenues--$1500000

Working

Fixed cost

$    3,00,000.00

Variable cost Percentage

80%

Net profit earned

$        84,000.00

Operating profit (84000/60 x 100)

$    1,40,000.00

Contribution margin(300000 + 140000)

$    4,40,000.00

Contribution margin (100-80%)

20%

Total revenues (440000 /20 x 100)

$ 22,00,000.00

Contribution margin ratio

20%

Breakeven sales (Fixed cost/CM ratio)

$ 15,00,000.00

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