If sales are $914,000, variable costs are $498,130, and operating income is $260,000, what is the contribution margin ratio?
A) 52.2%
B) 28.4%
C) 54.5%
D) 45.5%

Question

Quizplus · Accepted Answer

The contribution margin is calculated as sales minus variable costs, which is $914,000 - $498,130 = $415,870. The contribution margin ratio is then the contribution margin divided by sales, $415,870 / $914,000 = 0.455 or 45.5%.

If Sales Are $914,000, Variable Costs Are $498,130, and Operating