Question

Bryce co. sales are $914,000, variable costs are $498,130, and operating income is $196,000. what is the contribution margin ratio?

Answer 1

Sales: $914,000

Variable Costs: $498,130

Operating Income: $196,000

Contribution Margin Ratio = ?

Formula:

Contribution Margin Ratio = (Sales – Variable Costs) / Sales

Solution:

Contribution Margin Ratio = ( $914,000 - $498,130) / $914,000

Contribution Margin Ratio = 45.5% (Answer)