Determine the contribution margin ratio (round to 3 decimal places if applicable). a) 0.518
FRANCORP is a large retailer of automobiles floor mats. An income statement for the most recent quarter is presented below:
Sales $927,500
Less Cost of Goods Sold 275,000
Gross Marign 652,500
Less Operating Expenses:
Selling Expenses 205,500
Administrative Expenses 280,000 485,500
Net Income 167,000
The liners sell, on average, for $350 each. The department's variable selling expenses are $35 per liner sold. The remaining selling expenses are fixed. The administrative expenses are 35% variable and 65% fixed. The company purchases its floor mats from a supplier at a cost of $125 per mat. Cost of Goods Sold is 50% variable.
Determine the contribution margin ratio (round to 3 decimal places if applicable).
a) 0.518
b) 0.449
c) 0.615
d) 0.646
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