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3 years ago

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If sales are $425,000, variable costs are 62% of sales, and operating income is $50,000, what is the contribution margin ratio?

select one:
a. 38%
b. 26.8%
c. 11.8%
d. 62%

2 answers:

kodGreya [7K]3 years ago

5 0

Answer:

The answer is a): 38%.

Step-by-step explanation:

Contribution margin ratio is a ratio of the difference between sales and variable costs/expenses, to the sales; it can be expressed in percentage.

Sales = $425,000

Variable costs = 62% of $425,000 = 62 × $425,000 ÷ 100 = $263,500 .

The difference between sales and variable cost = $425,000 — $263,500 = $161,500 .

Therefore, the contribution margin ratio = $161,500 ÷ $425,000 = 0.38

The contribution margin ratio expressed in percentage = 0.38 × 100 = 38% .

Dmitry_Shevchenko [17]3 years ago

4 0

In an internal operating income statement, the form is as such:

(1) Sales (or Revenue) - Total Variable Costs = Contribution Margin;

(2) Contribution Margin - Total Fixed Costs = Operating Income

and

(3) Contribution Margin Ratio = Contribution Margin/Sales

The first equation helps us out. Sales is the whole amount for this statement, or 100%. We know variable costs are 62% and the rest goes to the Cont. Margin.

100% - 68% = 32% (choice A)

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Answer:

1) There were 33 $4,000 investors and 27 $8,000 investors.

2) The solution in x = 4, y = 9.

3) There were 24 nickels and 56 dimes.

Step-by-step explanation:

1) A lawyer has found 60 investors for a limited partnership to purchase an inner-city apartment building, with each contributing either $4,000 or $8,000. If the partnership raised $348,000, then how many investors contributed $4,000 and how many contributed $8,000?

I am going to say that:

x is the number of investors that contributed 4,000.

y is the number of investors that contributed 8,000.

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There are 60 investors. So:

$x + y = 60$

In all, the partnership raised $348,000. So:

$4000x + 8000y = 348000$

I am going to simplify by 4000. So:

$x + 2y = 87$

Solving the system:

The elimination method is a method in which we can transform the system such that one variable can be canceled by addition. So:

$1)x + y = 60$

$2)x + 2y = 87$

I am going to multiply 1) by -1. So we have

$1)-x - y = -60$

$2)x + 2y = 87$

By addition, the x are going to cancel each other

$-x + x - y + 2y = -60 + 87$

$y = 27$

For x:

$x + y = 60$

$x = 60-y = 60-27 = 33$

There were 33 $4,000 investors and 27 $8,000 investors.

2) Solve the system by row-reducing the corresponding augmented matrix.

$2x + y = 17$

$x + y = 13$

This system has the following augmented matrix:

$\left[\begin{array}{ccc}2&1&17\\1&1&13\end{array}\right]$

To help the row reducing, i am going to swap the first with the second line:

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So we have:

$\left[\begin{array}{ccc}1&1&13\\2&1&17\end{array}\right]$

Now, reducing the first column.

$L2 = L2 - 2L1$

So we have:

$\left[\begin{array}{ccc}1&1&13\\0&-1&-9\end{array}\right]$

Now we do:

$L2 = -L2$

And the matrix is:

$\left[\begin{array}{ccc}1&1&13\\0&1&9\end{array}\right]$

Now to reduce the second column, we do:

$L1 = L1 - L2$

$\left[\begin{array}{ccc}1&0&4\\0&1&9\end{array}\right]$ .

So the solution is:

x = 4, y = 9.

3) A jar contains 80 nickels and dimes worth $6.80. How many of each kind of coin are in the jar?

I am going to say that x is the number of nickels and y is the number of dimes.

Each nickel is worth 5 cents and each dime is worth 10 cents.

Building the system:

There are 80 coins in all:

$x + y = 80$

They are worth $6.80. So:

$0.05x + 0.10y = 6.80$

Solving the system:

$1)x + y = 80$

$2)0.05x + 0.10y = 6.80$

I am going to divide 1) by -10, so we can cancel y. So:

$1)-0.10x - 0.10y = -8$

$2)0.05x + 0.10y = 6.80$

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$x = \frac{120}{5}$

$x = 24$

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$x + y = 80$

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Answer:

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