2. Contribution Margin Ratio a. Young Company budgets sales of $1,280,000, fixed costs of $54,700, and...

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2. Contribution Margin Ratio a. Young Company budgets sales of $1,280,000, fixed costs of $54,700, and...

2. Contribution Margin Ratio

a. Young Company budgets sales of $1,280,000, fixed costs of $54,700, and variable costs of $243,200. What is the contribution margin ratio for Young Company? (Enter your answer as a whole number.)
%

b. If the contribution margin ratio for Martinez Company is 61%, sales were $583,000, and fixed costs were $280,950, what is the income from operations?
$

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Answer 1

Answer #1

a). Sales = $1,280,000
Less: Variable cost = $243,200
Contribution margin = $1,036,800

Contribution margin ratio = Contribution margin / Sales
= $1,036,800 / $1,280,000
= 0.81 or 81%

b). Sales = $583,000
Contribution margin = $583,000 * 61% = $355,630
Less: Fixed cost = $280,950
Income from operations = $74,680

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Answer 2

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2. Contribution Margin Ratio a. Young Company budgets sales of $1,280,000, fixed costs of $54,700, and...

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2. Contribution Margin Ratio a. Young Company budgets sales of $1,280,000, fixed costs of $54,700, and...