Calculate Contribution Margin Ratio
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Question
A manufacturer of cedar shingles has supplied the following data:
|
Bundles of cedar shakes produced and sold |
250,000 |
|
|
Sales revenue |
$2,025,000 |
|
|
Variable expense: |
||
|
Variable manufacturing expense |
$974,000 |
|
|
Variable selling and administrative expense |
259,000 |
1,233,000 |
|
Contribution margin |
792,000 |
|
|
Fixed expense: |
||
|
Fixed manufacturing expense |
511,000 |
|
|
Fixed selling and administrative expense |
270,000 |
781,000 |
|
Net operating income |
$11,000 |
The company's contribution margin ratio is closest to:
a. 31%
b. 69%
c. 61%
d. 39%
Summary
The question belongs to Accounting and it discusses about calculation of contribution margin ratio.
Total Word Count 11
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