Find solutions to your problems with the help of IDNLearn.com's knowledgeable users. Discover prompt and accurate answers from our community of experienced professionals.
Sagot :
From given data of sales, variable costs and income we get,
- Contribution margin ratio = 44%
- Fixed cost = $1,936
What is contribution margin ratio?
The difference between a company's sales and variable costs, represented as a percentage, is the contribution margin ratio.
The total income that can be used to cover fixed costs and turn a profit is represented by an entity's total margin. The ratio, when applied to a single unit sale, expresses the percentage of profit made on that particular sale.
The basis for break-even analysis, which is employed in the overall cost and sales price planning for items, is the contribution margin. A product's selling price range, the expected level of profit from sales, and the structure of sales commissions paid to sales team members, distributors, or commission agents can all be determined using the contribution margin. It also assists in separating out the fixed cost and profit components resulting from product sales.
Given: Sales = $ 5,400, Variable costs $ 3,024, income $ 440
Contribution margin ratio = (Contribution margin/sales) × 100
= $2,376/$5,400 × 100
= 44%
Fixed cost = Contribution - Net income
= $2,376 - $440
= $1,936
To know more about contribution margin ratio, follow link:
https://brainly.com/question/24039258
#SPJ4
Your presence in our community is highly appreciated. Keep sharing your insights and solutions. Together, we can build a rich and valuable knowledge resource for everyone. IDNLearn.com has the solutions you’re looking for. Thanks for visiting, and see you next time for more reliable information.
