Asked by
kailee cluasen
on Nov 17, 2024
Verified
If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, the contribution margin ratio is
A) 45%
B) 55%
C) 62%
D) 32%
Contribution Margin Ratio
A metric that shows the percentage of sales revenue left after variable costs are deducted, indicating how much contributes to fixed costs and profits.
Operating Income
Profits generated from a company's core business operations, excluding deductions of interest and taxes.
- Apply cost-volume-profit (CVP) analysis in business decisions.
- Examine and initiate tactics based on the role of the contribution margin in affecting profit margins.
Verified Answer
YR
Learning Objectives
- Apply cost-volume-profit (CVP) analysis in business decisions.
- Examine and initiate tactics based on the role of the contribution margin in affecting profit margins.