Question

If the contribution margin ratio for domino company is 35%, sales were $2,100,000, and fixed costs were $400,000, what was the income from operations?

Answer 1

Hi there

income from operations=
Sales-(fixed+variable) cost

So we need to variable cost
Variable cost=
Sales-Contribution margin

Contribution margin=
2,100,000×0.35
=735,000

Variable cost=2,100,000−735,000
=1,365,000

Income from operation
2,100,000−(400,000+1,365,000)
=335,000 ....Answer

Hope it helps