Refer to the following Gunther's Emporium information to answer the question(s)below:
Gunther's Emporium expects net sales of $2,396,919 for the upcoming year, with variable expenses totaling $1,813,443 and fixed expenses of $412,190.
-Using break-even analysis, what is Gunther's contribution margin?
A)4 percent
B)32 percent
C)24 percent
D)12 percent

Question

Quizplus · Accepted Answer

Contribution margin is calculated by subtracting variable expenses from net sales:

Contribution Margin = Net Sales - Variable Expenses

Contribution Margin = $2,396,919 - $1,813,443

Contribution Margin = $583,476

The contribution margin as a percentage of net sales is calculated by dividing the contribution margin by net sales:

Contribution Margin % = (Contribution Margin / Net Sales) x 100

Contribution Margin % = ($583,476 / $2,396,919) x 100

Contribution Margin % = 24.34%, which is closest to 24% (option C).

Refer to the Following Gunther's Emporium Information to Answer the Question(s)below