What is the company's contribution margin ratio?

Question

Mar 19, 2008, 06:35 PM

Noelle24

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Join Date: Mar 2008

Posts: 1

What is the company's contribution margin ratio?

What is the company's contribution margin ratio?

Sales $1,200,000
Variable expenses 800,000
Contribution margin 400,000
Fixed expenses 300,000
Net operating income $100,000

sold 20000 units

Answers

Mar 20, 2008, 09:20 PM	#2

morgaine300 Accounting Expert Join Date: Feb 2008 Posts: 1,396	A contribution margin ratio is just the contribution margin as a percent of sales. And to find what percent one thing is of another, you always divide in that order. Comments on this post CaptainForest agrees: Good answer

Mar 22, 2008, 03:52 PM	#3

CaptainForest Finance & Accounting Expert Join Date: Nov 2005 Location: Canada Posts: 3,658	Contribution Margin Ratio = Contribution Margin / Total Sales Contribution Margin = Sales – Variable Cost CM Ratio = 400,000 / 1,200,000 CM Ratio = 33.33%

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