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Below is an incomplete contribution margin income statement for Barrys Coffee Cakes. Use this information to answer the foll
Knowledge Check 02 What is the contribution margin ratio? 33% 50% 40% 67% Knowledge Check 03 If there is no change in fixed c
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  • Check #01
    Unit Contribution margin = $ 100000 contribution margin / 20000 units
    = $ 5.00
    Correct Answer = Option #3: $ 5.00
  • Check #02
    CM Ratio = ($100000 contribution margin / $ 150000 sales revenue) x 100
    = 66.67% = 67%
    Correct Answer = Option #4: 67%
  • Check #03
    >Net Operating Income for 25000 units
    = (25000 units x $ 5 contribution margin per unit) - $ 30000 fixed cost
    = 125000 – 30000
    = $ 95,000

Correct Answer = Option #1: $ 95,000

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