If variable costs are 35% of sales and sales increase by $50,000 this month because of a special promotion, by how much will contribution margin increase?

Name: If variable costs are 35% of sales and sales increase by $50,000 this month because of a special promotion, by how much will contribution margin increase?
Brand: Quizplus
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Question

Quizplus · Accepted Answer

If the variable costs are 35% of sales, then the contribution margin is 65% of sales. Therefore, the contribution margin would increase by 65% of $50,000, which is $32,500 (C).

If Variable Costs Are 35% of Sales and Sales Increase