Question

# Contribution Margin Ratio a. Yountz Company budgets sales of \$730,000, fixed costs of \$49,300, and variable...

Contribution Margin Ratio

a. Yountz Company budgets sales of \$730,000, fixed costs of \$49,300, and variable costs of \$219,000. What is the contribution margin ratio for Yountz Company? (Enter your answer as a whole number.)
%

b. If the contribution margin ratio for Vera Company is 41%, sales were \$781,000, and fixed costs were \$233,750, what was the income from operations?
\$

Contribution Margin = Sales - Variable Costs
Contribution Margin = \$730,000 - \$219,000
Contribution Margin = \$511,000

Contribution Margin Ratio = Contribution Margin / Sales
Contribution Margin Ratio = \$511,000 / \$730,000
Contribution Margin Ratio = 70%

Contribution Margin Ratio = Contribution Margin / Sales
41% = Contribution Margin / \$781,000
Contribution Margin = \$320,210

Income from Operations = Contribution Margin - Fixed Costs
Income from Operations = \$320,210 - \$233,750
Income from Operations = \$86,460