If a company wishes to increase its operating income by $28,000,and currently has a contribution margin...
If a company wishes to increase its operating income by $28,000,and currently has a contribution margin ratio of 60%, then sales would have to increase by $40,000. true/false
Homework Answers
Contribution margin ratio is 60%.
Therefore, 60% of the increase in sales will contribute towards increasing the operating income (assuming that fixed costs remain constant).
If the increase in sales is $40,000, the operating income will increase by 24,000 ($40,000 x 60%).
Thus, the given statement is false.
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If a company wishes to increase its operating income by
$28,000,and currently has a contribution margin...
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If a company is currently operating at its breakeven point, which of the following statements is...
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The company wishes to increase its total dollar contribution
margin by 65% in 2021. Determine by how much it will need to
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increase its sales if all other factors remain constant.
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