Question

# Contribution Margin Ratio a. Yountz Company budgets sales of \$760,000, fixed costs of \$47,900, and variable...

Contribution Margin Ratio a. Yountz Company budgets sales of \$760,000, fixed costs of \$47,900, and variable costs of \$212,800. 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 65%, sales were \$678,000, and fixed costs were \$326,120, what was the income from operations?

contribution margin = Sales - Variable Cost

= \$ 760,000 - \$ 212800=

= \$ 547,200

contribution margin ratio = contribution margin / Sales *100

= \$ 547,200 / \$ 760,000 *100

= 72%

Hence the correct answer is 72%

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contribution margin = Sales * contribution margin Ratio

= \$ 678,000 * 65%

= \$ 440,700

Fixed Cost = \$ 326,120

Hence, the income from operations =   contribution margin -Fixed Cost

= \$ 440,700 - \$ 326,120

= \$ 114,580

Hence the correct answer is \$ 114,580