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marysya [2.9K]
3 years ago
7

Sales were $500,000. The variable cost of goods sold was $300,000. The variable selling and administrative expenses were $75,000

. Fixed costs were $60,000. Using variable costing, what is the contribution margin
Business
1 answer:
MA_775_DIABLO [31]3 years ago
7 0

Answer:

$125,000

Explanation:

The sales were $500,000

The variable cost of goods sold is $300,000

The variable selling and administrative expenses were $75,000

The fixed costs were $60,000

Therefore the contribution margin ratio using the variable costing can be calculated as follows

CMR= Sales revenue-Variable cost of good sold-The variable selling and administrative expenses

= $500,000-$300,000-$75,000

= $200,000-$75,000

= $125,000

Hence the contribution margin ratio is $125,000

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