May June 1250000 fixed cost i ile and the Determine the vari

May June 1,250,000 fixed cost. i ile and the Determine the variable cost per gross-ton m EX 4-9Contribution margin ratio a. B Company budgets sales of $1,800,000, fixed costs of $1,000,000, and variable f $1,080,000. What is the contribution margin ratio for Bryan Company? b. If the and fixed costs and fixcontribution margin ratio for Carnegie Company is 32%, sales were $900,000 were $210,000, what was the income from operations? EX 4-10 Contribution margin and contribution margin ratio For a recent year, McDonald\'s company-owned restaurants had the expenses (in millions): following sales and

Solution

Contribution margin=Sales-Variable expenses

1.

Contribution margin=(1,800,000-1,080,000)=$720,000

Hence Contribution margin ratio=Contribution margin/Sales

=(720,000/1,800,000)

which is equal to

=40%

2.

Contribution margin=$900,000*32%

which is equal to=$288000

Hence income from operations=Contribution margin-Fixed cost

=(288000-210,000)

which is equal to

=$78000.