Habitat Help Company provides cleaning services to commercial and residential customers. The commercial business segment provided services to 310 customers and the residential business segment provided services to 575 customers. $$\begin{array} { | l | r | r | r | }
\hline & \text { Commercial } & \text { Residential } & { \text { Total } } \
\hline \text { Service Revenue } & \$ 91,000 & \$ 121,000 & \$ 212,000 \
\hline \text { Variable Costs } & 23,000 & 47,000 & 70,000 \
\hline \text { Fixed Costs } & \underline { 46,000 } & \underline { 48,000 } & \underline { 94,000 } \
\hline \text { Operating Income } & \$ 22,000 & \$ 26,000 & \$ 48,000 \
\hline
\end{array}$$ What is the contribution margin ratio for Habitat Help Company? (Round answer to two decimal places.)

Question

Habitat Help Company provides cleaning services to commercial and residential customers. The commercial business segment provided services to 310 customers and the residential business segment provided services to 575 customers. $$\begin{array} { | l | r | r | r | } 
\hline & \text { Commercial } & \text { Residential } & { \text { Total } } \
\hline \text { Service Revenue } & \$ 91,000 & \$ 121,000 & \$ 212,000 \
\hline \text { Variable Costs } & 23,000 & 47,000 & 70,000 \
\hline \text { Fixed Costs } & \underline { 46,000 } & \underline { 48,000 } & \underline { 94,000 } \
\hline \text { Operating Income } & \$ 22,000 & \$ 26,000 & \$ 48,000 \
\hline
\end{array}$$ What is the contribution margin ratio for Habitat Help Company? (Round answer to two decimal places.)

Quizplus · Accepted Answer

The contribution margin ratio is calculated as total contribution margin divided by total sales. The total contribution margin is the difference between total sales and total variable costs, which is $212,000 - $70,000 = $142,000. The contribution margin ratio is then $142,000 / $212,000 = 0.6698, or 66.98%.

Habitat Help Company Provides Cleaning Services to Commercial and Residential