Question

Cross Creek Clinic has revenue totaling $200,000. The clinic has costs totaling $100,000. Of this amount, 60% is variable cost and 40% is fixed cost. What is the clinic’s contribution margin, expressed in dollars?

Answer 1

Answer:

Contribution Margin= $140,000

Explanation:

Giving the following information:

Cross Creek Clinic has revenue totaling $200,000. The clinic has costs totaling $100,000. Of this amount, 60% is a variable cost and 40% is fixed cost.

To calculate the contribution margin we need to use the following formula:

Contribution margin= total sales - total variable cost

CM= 200,000 - (100,000*0.6)= $140,000