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
