Management predicts total sales for June to be $3,000,000, yielding a margin of safety of $1,000,000 and a contribution margin ratio of 25%. Which of the following amounts is not consistent with this information?

Question

Quizplus · Accepted Answer

The variable costs cannot be $750,000 because with a contribution margin ratio of 25%, the contribution margin is $750,000 (25% of $3,000,000), meaning variable costs should be $2,250,000, not $750,000.

Management Predicts Total Sales for June to Be $3,000,000, Yielding