Figure 4-3.Paney Company makes calendars. Information on cost per unit is as follows:
Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10.
-Refer to Figure 4-3. What is the variable expense ratio?

Question

Figure 4-3.Paney Company makes calendars. Information on cost per unit is as follows:
  Fixed marketing expense totaled $13,000 and fixed administrative expense totaled $35,000. The price per calendar is $10.
-Refer to Figure 4-3. What is the variable expense ratio?

Quizplus · Accepted Answer

Variable expense ratio is calculated by dividing variable expenses by sales. In this case, variable expenses are $40,000 and sales are $100,000. So, variable expense ratio = 40,000/100,000 = 40%.