Question

Management is considering the following independent alternatives for 2018. 1. Increase unit selling price 20% with no change
94. Armstrong Industries has a contribution margin of $240,000 and a contribution margin ratio of 30%. How much are total var
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Answer #1

NOTE: Question posted first is missing information necessary to solve it.

(94)

OPTION B: $56000

EXPLANATION:

sales revenue = contribution margin/contribution margin ratio

= $240000/30%

= $800000

therefore,

total variable cost = sales revenue - contribution margin

= $800000 - $240000

= $560000

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