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For each dollar of sales, how much is left to cover fixed costs and contribute to income?

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User Paige
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1 Answer

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Final answer:

To calculate the amount left to cover fixed costs and contribute to income for each dollar of sales, subtract fixed costs and variable costs from total revenue.

Step-by-step explanation:

To determine how much is left to cover fixed costs and contribute to income for each dollar of sales, we need to calculate the profit. Profit is equal to total revenue minus total costs, where total costs = fixed costs + variable costs. In this case, the center earns $20,000 in revenues and has variable costs of $15,000. If we assume fixed costs are $10,000, then the profit would be $20,000 - ($10,000 + $15,000) = $5,000. Therefore, for each dollar of sales, $5,000 is left to cover fixed costs and contribute to income.

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User Donnie DeBoer
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