Contribution Format 2016 2017 2018 Sales $ 135,987 $ 177,866 $ 232,887 Variable expenses Cost of...

Contribution Format
	2016	2017	2018
Sales	$ 135,987	$ 177,866	$ 232,887
Variable expenses
Cost of sales	88,265	111,934	139,156
Fulfillment	14,095	20,199	27,222
Marketing	7,233	10,069	13,814
Technology and content	8,042.50	11,310	14,418.50
Total variable expenses	117,636	153,512	194,610
Contribution margin	$ 18,351	$ 24,354	$ 38,277
Fixed expenses
Fulfillment	3,524	5,050	6,805
Technology and content	8,042.50	11,310	14,418.50
General and admin	2,432	3,674	4,336
Other	167	214	296
Total fixed expenses	14,165	20,248	25,856
Operating income	$ 4,186	$ 4,106	$ 12,421

calculate the contribution margin ratio , break even dollar sales, margin of safety (dollars) safety margin % of sales

Expert Solution

	Contribution Format
		2016	2017	2018
i	Sales	135,987	177,866	232,887
ii	Total variable expenses	117,636	153,512	194,610
iii	Contribution margin	18,351	24,354	38,277
iv	Total fixed expenses	14,165	20,248	25,856
v	Operating income	4186	4,106	12,421

vi=iii/i	Contribution margin ratio	13.49%	13.69%	16.44%
vii=iv/vi	Break even dollar sales	104,967.35	147,878.41	157,314.48
viii=i-vii	Margin of safety $	31,019.65	29,987.59	75,572.52
ix=viii/i	Margin of safety %	22.81%	16.86%	32.45%

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