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Omega Manufacturing Company has sales revenue of $3,600,000, with direct materials cost of $540,000, direct labor cost of $720,000, variable overhead of $180,000, and fixed costs of $495,000. Calculate the contribution margin rate that represents the percentage of each sales dollar available to cover fixed costs and generate profit.

Omega Manufacturing Company has sales revenue of $3,600,000, with direct materials cost of $540,000, direct labor cost of $720,000, variable overhead of $180,000, and fixed costs of $495,000. Calculate the contribution margin rate that represents the percentage of each sales dollar available to cover fixed costs and generate profit.

FINANCIAL ACCOUNTING
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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Omega Manufacturing Company has sales revenue of $3,600,000, with direct materials cost of $540,000, direct labor cost of $720,000, variable overhead of $180,000, and fixed costs of $495,000. Calculate the contribution margin rate that represents the percentage of each sales dollar available to cover fixed costs and generate profit.
Transcribed Image Text:Omega Manufacturing Company has sales revenue of $3,600,000, with direct materials cost of $540,000, direct labor cost of $720,000, variable overhead of $180,000, and fixed costs of $495,000. Calculate the contribution margin rate that represents the percentage of each sales dollar available to cover fixed costs and generate profit.
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