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belka [17]
3 years ago
13

Forward Company makes and sells power tools. The budgeted sales are $480,000, the budgeted variable costs are $175,000, and the

budgeted fixed costs are $260,000. What is the budgeted percentage contribution margin ratio? (Note: Round your answer to two decimal places.)
Business
1 answer:
den301095 [7]3 years ago
5 0

Answer:

63.54% (Approx)

Explanation:

The computation of the budgeted percentage contribution margin ratio is shown below:-

For computing the contribution margin ratio firstly we need to calculate the contribution margin in dollars

Contribution margin = Sales - Variable cost

= ($480,000 - $175,000)

= $305,000

Contribution margin ratio = Contribution margin ÷ Sales

= ($305,000 ÷ $480,000)

= 63.54% (Approx)

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