What is the contribution margin ratio? (I need the steps to get to the answer)38%, 26.8% or 11.8% If sales are $425,000, variable costs are 62% of sales, and income from operations is $50,000, what is the contribution margin ratio?

Given: Cost of sales = $ 425,000 Variable cost = 62 % Income = $ 50,000 Concept: The subtraction of the cost of the product with the variable cost in order to increase the profit for the selling of each unit is called contribution margin. To calculate the contribution margin, Contribution margin ratio = 100% - Variable cost ratio = 100% - 62% Contribution margin ratio = 38% The contribution margin ratio is 38 %

Answered: If sales are $425,000, variable costs…

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If sales are $425,000, variable costs are 62% of sales, and income from operations is $50,000, what is the contribution margin ratio?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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What is the contribution margin ratio? (I need the steps to get to the answer)

38%, 26.8% or 11.8%

If sales are $425,000, variable costs are 62% of sales, and income from operations is $50,000, what is the contribution margin ratio?

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