Question

A cement manufacturer has supplied the following data: Tons of cement produced and sold 320,000 Sales revenue $ 1,024,000 Variable manufacturing expense $ 241,000 Fixed manufacturing expense $ 340,000 Variable selling and administrative expense $ 199,320 Fixed selling and administrative expense $ 101,000 Net operating income $ 142,680 The company's contribution margin ratio is closest to:

Answer 1

contribution margin ratio= 0.57

Step-by-step explanation:

Giving the following information:

Sales revenue $ 1,024,000

Total variable cost:

Variable manufacturing expense $ 241,000

Variable selling and administrative expense $ 199,320

Total= $440,320

To calculate the contribution margin ratio, we need to use the following formula:

contribution margin ratio= (sales - total variable cost) / sales

contribution margin ratio= (1,024,000 - 440,320) / 1,024,000

contribution margin ratio= 0.57