 | |
| Browse | Ask | Answer | Search | Join/Login | |
Managerial accounting - contribuiton margin ratio
Asked Feb 21, 2007, 10:04 AM
—
1 Answer Mark Corporation produces two models of calculators. The Business model sells for 60, and the Math model sells for 40. The variable expenses are given below: Business Math Model Model Variable production costs per unit $15 $16 Variable selling and administrative expenses per unit $9 $6 The fixed expenses are 75,000 per month. The expected monthly sales of each model are: Business, 1,000 units; Math, 500 units. The contribution margin ratio for the Business model is: (a) 60 percent (b) 85 percent (c) 40 percent (d) 75 percent Can you show me the work to get the correct answer? Thanks! |
1 Answer
| ||||
| The contribution margin is the selling price minus the total variable costs. The contribution margin ratio is the contribution margin divided by the selling price. Make sure to include both variable production costs and variable selling costs when calculating the total variable costs. Fixed costs and number of units sold per month can be ignored on this problem. Most problems will throw in some extra piece of information to try to mess you up. | ||||
| |
Not your question? Ask your question View similar questions
| Thread Tools | Search this Thread |
Add your answer here.
Check out some similar questions!
Accounting ratio analysis [ 2 Answers ]
Current assets consist of cash, marketable securities,accounts receivable and inventory. Inventory 165,000 Total assets 1,200,000 Current assets 3:1 Acid test ratio 2.1:1 Debt to equity ratio 1.20:1 Questios is please find non current assets?
Managerial Accounting [ 0 Answers ]
Calculate the following variances: direct materials price variance, direct materials quantity variance, total direct materials cost variance, direct labor rate variance, direct labor time variance and total direct labor cost variance. Decide whether each variance is favorable or unfavorable. I...
View more Accounting questions Search
