Question

For Coronado Industries, sales is $3000000, fixed expenses are $700000, and the contribution margin ratio is 36%. What are the total variable expenses

Answer 1

Variable cost= $1,920,000

Step-by-step explanation:

Giving the following information:

Sales= $3,000,000

Contribution margin ratio= 0.36

The contribution margin ratio is the dollar remaining after deducting from sales of the variable component. In 1 dollar, the contribution margin is $0.36.

In this case:

Variable cost= sales*(1-Contribution margin ratio)

Variable cost= 3,000,000*0.64

Variable cost= $1,920,000