Forward Company makes and sells power tools.The budgeted sales are $480,000, budgeted variable costs are $175,000, and budgeted fixed costs are $260,000.What is the budgeted contribution margin ratio? (Note: Round answer to two decimal places.)
A) 35.64%
B) 63.54%
C) 54.45%
D) 89.50%
E) 50.20%

Question

Quizplus · Accepted Answer

Budgeted contribution margin ratio = Budgeted contribution margin / Budgeted sales
Budgeted contribution margin = Budgeted sales - Budgeted variable costs = ($480,000 - $175,000) = $305,000
Budgeted contribution margin ratio = $305,000 / $480,000 = 0.6354 or 63.54%

Forward Company Makes and Sells Power Tools