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Marizza181 [45]
3 years ago
7

If sales are $803,000, variable costs are 66% of sales, and operating income is $262,000, what is the contribution margin ratio

Business
1 answer:
vfiekz [6]3 years ago
7 0

Answer:

34%

Explanation:

The formula to calculate the contribution margin ratio is:

Contribution margin ratio= (Sales – variable expenses)/sales

Sales=$803,000

Variable expenses=$803,000*66%=$529,980

Now, you can replace the values:

Contribution margin ratio=($803,000-$529,980)/$803,000

Contribution margin ratio=0.34

According to this, the answer is that the contribution margin ratio is 34%.

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