If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?
A) 45%
B) 55%
C) 62%
D) 32%

Name: If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio? A) 45% B) 55% C) 62% D) 32%
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Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Sales - Variable Costs) / Sales. Given that variable costs are 55% of sales, the contribution margin ratio is 100% - 55% = 45%.

If Sales Are $820,000, Variable Costs Are 55% of Sales