Required: 1. Calculate the contribution margin ratio. Note: Enter as a percent, rounded to the nearest whole number. fill in the blank 1 % 2. Calculate the variable cost ratio. Note: Enter as a percent, rounded to the nearest whole number. fill in the blank 2 % 3. Calculate the break-even sales revenue for Ashton. Note: Round your answer to the nearest dollar.
Required: 1. Calculate the contribution margin ratio. Note: Enter as a percent, rounded to the nearest whole number. fill in the blank 1 % 2. Calculate the variable cost ratio. Note: Enter as a percent, rounded to the nearest whole number. fill in the blank 2 % 3. Calculate the break-even sales revenue for Ashton. Note: Round your answer to the nearest dollar.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue
The controller of Ashton Company prepared the following
| Sales | $88,000 |
| Total variable cost | 23,760 |
| Contribution margin | $64,240 |
| Total fixed cost | 43,800 |
| Operating income | $20,440 |
Required:
1. Calculate the contribution margin ratio. Note: Enter as a percent, rounded to the nearest whole number.
fill in the blank 1 %
2. Calculate the variable cost ratio. Note: Enter as a percent, rounded to the nearest whole number.
fill in the blank 2 %
3. Calculate the break-even sales revenue for Ashton. Note: Round your answer to the nearest dollar.
$fill in the blank 3
4. How could Ashton increase projected operating income without increasing the total sales revenue?
Decrease the contribution margin ratio
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