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if sale are triple to $150,000, total variable costs will equal to?

if sales are triple to $150,000, total fixed costs will equal to?

$50,000 (30,000) Sales Less variable expenses Contribution margin Less fixed expenses Net income 20,000 (12500) 500 Required: a Contribution margin ratio is b. Breakeven point in total sales dollarsis To achieve $40,000 in net income, sales must total d. If sales increase by $50,000, net income will increase by

Explanation / Answer

1. Variable costs are the costs which will change in relation to some factor. Here the only factor that can be taken is in relation sales.

If the Sales are tripled to $150,000, then variable costs also will triple to $20,000 * 3 = $60,000

2. Fixed Costs are fixed irrespective of the activity. So if the sales are tripled to $150,000, then also fixed costs will be $12,500

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