Certainly! Below is the transcription for an educational website context:---**Chapter 20****Contribution Margin Ratio**a. Young Company budgets sales of $112,900,000, fixed costs of $25,000,000, and variable costs of $66,611,000. What is the contribution margin ratio for Young Company?[Input Box] %b. If the contribution margin ratio for Martinez Company is 40%, sales were $34,800,000, and fixed costs were $1,500,000, what was the operating income?$[Input Box]---This section introduces the concept of the contribution margin ratio, which is vital for understanding how sales relate to costs and profits in a company. For part a, users are prompted to calculate the contribution margin ratio, which involves determining the percentage of sales revenue that exceeds total variable costs. In part b, the task involves using a given contribution margin ratio to find out the operating income by subtracting fixed costs from the contribution margin.

Contribution margin = sales - variable costs = $112900000-66611000 = $46,289,000

a. Young Company budgets sales of $112,900,000, fixed costs of $25,000,000, and variable costs of $66,611,000. What is the contribution margin ratio for Young Company? % b. If the contribution margin ratio for Martinez Company is 40%, sales were $34,800,000, and fixed costs were $1,500,000, what was the operating income?

a. Young Company budgets sales of $112,900,000, fixed costs of $25,000,000, and variable costs of $66,611,000. What is the contribution margin ratio for Young Company? % b. If the contribution margin ratio for Martinez Company is 40%, sales were $34,800,000, and fixed costs were $1,500,000, what was the operating income?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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