Question

For franklin, inc., sales is $1,500,000, fixed expenses are $450,000, and the contribution margin ratio is 36%. what are the total variable expenses?

Answer 1

The answer is "$960,000".

This is how we calculate this;
sales = $1,500,000
fixed expenses = $450,000
contribution margin ratio = 36% = 36/100 = 0.36
total variable expenses = ($1,500,000) (1 – 0.36)
= (1,500,000)(0.64)
= $960,000