Question

) Kelchner Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (3,000 units) $ 180,000 Variable expenses 108,000 Contribution margin 72,000 Fixed expenses 62,400 Net operating income $ 9,600 The contribution margin ratio is closest to: A) 67% B) 40% C) 33% D) 60%

Answer 1

Answer:

Contribution margin ratio= 0.4

Explanation:

Giving the following information:

Sales (3,000 units) $ 180,000

Variable expenses 108,000

Contribution margin 72,000

Fixed expenses 62,400

Net operating income $ 9,600

Contribution margin ratio= contribution margin/ selling price

Contribution margin= (72000 /3000 units)= $24

Selling price= (180000/3000)= $60

Contribution margin ratio= 24/60= 0.4