Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue The controller of Ashton Company prepared the following projected income statement: Sales $88,000 Total Variable cost 61,600 Contribution margin $26,400 Total Fixed cost 10,500 Operating income $15,900 Required: 1. Calculate the contribution margin ratio. % 2. Calculate the variable cost ratio. % 3. Calculate the break-even sales revenue for Ashton.$ 4. How could Ashton increase projected operating income without increasing the total sales revenue?
Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue The controller of Ashton Company prepared the following projected income statement: Sales $88,000 Total Variable cost 61,600 Contribution margin $26,400 Total Fixed cost 10,500 Operating income $15,900 Required: 1. Calculate the contribution margin ratio. % 2. Calculate the variable cost ratio. % 3. Calculate the break-even sales revenue for Ashton.$ 4. How could Ashton increase projected operating income without increasing the total sales revenue?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue
The controller of Ashton Company prepared the following
Sales | $88,000 |
Total Variable cost | 61,600 |
Contribution margin | $26,400 |
Total Fixed cost | 10,500 |
Operating income | $15,900 |
Required:
1. Calculate the contribution margin ratio.
%
2. Calculate the variable cost ratio.
%
3. Calculate the break-even sales revenue for Ashton.
$
4. How could Ashton increase projected operating income without increasing the total sales revenue?
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