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
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