Homework Sourseyounztz company budget sales of 2400000 fixed costs of 52500
younztz company budget sales of 2,400.000, fixed costs of $525,000, and a variable costs of $1,560,000. What is the contribution margin rationfor yountz company?
Solution
The contribution margin ration for yountz company is 35%.
Working:-
| Budget sales | $ 2,400,000 |
| Less: Variable costs | $ 1,560,000 |
| Contribution Margin | $ 840,000 |
| Contribution margin ratio = (Sales -Variable cost)/ sales | |
| = (2400000 – 1560000)/2400000 | |
| = 840000/2400000 | |
| = 0.35 or 35% | |
