Contribution Margin Ratio a. Matzinger Company budgets sales of $930,000, Costs

Question

Contribution Margin Ratio

a. Matzinger Company budgets sales of $930,000, Costs that tend to remain the same in amount, regardless of variations in the level of activity.fixed costs of $125,600, and Costs that vary in total dollar amount as the level of activity changes.variable costs of $558,000. What is the contribution margin ratio for Matzinger Company?
%

b. If the contribution margin ratio for Raynor Company is 69%, sales were $845,000, and fixed costs are $454,780, what is the operating income?
$

Explanation / Answer

a Contribution margin ratio for Matzinger Company = (930000-558000)/930000= 40% b Operating income = (845000*69%)-454780= 128270

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