Provide solution this financial accounting question Bert Company budgets sales of $1,300,000, fixedcosts of $52,700, and variable costs of $234,000.a. What is the contribution margin ratio for BertCompany?b. If the contribution margin ratio for ErnieCompany is 70%, sales were $576,000, and fixedcosts were $314,500, what was the income fromoperations?

Step 1: Define Contribution MarginThe remaining money accessible for fixed outlays after spending…

Answered: Bert Company budgets sales of…

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 4BE

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Stancil Dry Cleaners has determined the following about its costs: Total variable expenses are$42,000,total fixed expenses are $24,000, and the sales revenue needed to break even is $48,000. Determine the company's current 1) sales revenue and 2) operating income. (Hint: First, find the contribution margin ratio; then prepare the contribution margin income statement.) Use the contribution margin income statement and the shortcut contribution margin approaches to determine Stancil's current (1) sales revenue and (2) operating income. Begin by computing the contribution margin ratio. (Enter the result as a5 whole number.) The contribution margin ratio is 50 %. Prepare the contribution margin income statement at the calculated sales level. NOTE: the other picture is to show the options.

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