Scott Company's variable expenses are 72% of sales.The company's break-even point in sales is $2,450,000.If sales are $60,000 below the break-even point,the company would report a:

Name: Scott Company's variable expenses are 72% of sales.The company's break-even point in sales is $2,450,000.If sales are $60,000 below the break-even point,the company would report a:
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Question

Quizplus · Accepted Answer

The contribution margin ratio is 28% (100% - 72%). A $60,000 shortfall in sales results in a loss of $60,000 * 28% = $16,800.

Scott Company's Variable Expenses Are 72% of Sales