Sales are $750,000, variable costs are 70% of sales, and income from operations is $100,000. What...
Question:
Sales are $750,000, variable costs are 70% of sales, and income from operations is $100,000.
What is the contribution margin ratio and fixed cost?
Contribution Margin:
The contribution margin involves the understanding of fixed and variable costs. Fixed costs remain the same in total no matter how many units are sold but the price per unit will change. Variable costs per unit stay the same with the amount of units sold. Total variable costs vary with the amount of units sold.
Answer and Explanation: 1
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View this answerAnswer: Contribution margin ratio: 30%; Fixed costs: $125,000
Explanation:
Contribution margin ratio is calculated as:
(Sales - Variable costs)...
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Contribution Margin: Definition & Formula
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Chapter 22 / Lesson 20
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Understand what the contribution margin is. Learn the definition of contribution margin and understand its importance in business. Discover how to calculate it through examples.
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