Question

Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $ 335,000 Variable expenses 184,250 Contribution margin 150,750 Fixed expenses 107,000 Net operating income $ 43,750 What is total contribution margin if sales volume increases by 20%

Answer 1

Answer:

New contribution margin = $180,900

Explanation:

Given:

Total Sales = $335,000

Variable expenses = $184,250

Contribution margin = $150,750

Fixed expenses = $107,000

Net operating income = $43,750

Find:

New contribution margin if sales volume increases by 20%

Computation:

New sales = 335,000 x (1+20%)

New sales = $402,000

New variable expenses = $184,250 x (1+20%)

New variable expenses = $221,100

New contribution margin = New sales - New variable expenses

New contribution margin = $402,000 - $221,100

New contribution margin = $180,900