Question

The following partial information is available. Complete the table by filling in all the blanks. Each case is independent.

		Variable	Fixed	Total	Operating	Contribution
Case	Revenues	Costs	Costs	Costs	Income	Margin Percentage
a.	$4,000	_	$500	_	$1,460	_	%
b.	_	7,400	_	8,700	9,800	_	%
c.	10,600	_	3,200	_	_	30	%
d.	9,450	_	2,500	8,170	_	_	%

​(Round the contribution margin percentage to the nearest whole percent. Use parentheses or a minus sign for operating​ losses.)

		Variable	Fixed	Total	Operating	Contribution
Case	Revenues	Costs	Costs	Costs	Income	Margin Percentage
a.	$4,000	??	$500	??	$1,460	??	%

Answer 1

CASE	REVENUE	VARIABLE COST	FIXED COST	TOTAL COST	OPERATING INCOME	CONTRIBUTION MARGIN	C.M. %
a	4000	2040	500	2540	1460	1960	49%
b	18500	7400	1300	8700	9800	11100	60%
c	10600	10570	3200	13770	-3170	30	1%
d	9450	5670	2500	8170	1280	3780	40%

Working-Case(a)

Contribution=Fixed Cost+Operting Income

=500+1460=1960

Variable Cost=Sales-Contribution

=4000-1960

=2040

Total Cost=Variable Cost+Fixed Cost'

=2040+500=2540

Contribution Margin(%)=Contribution/Sales*100%=1960/4000*100%=49%

Workings(Case b)

Fixed Cost=Total Cost-Variable cost

=8700-7400=1300

Contribution=Fixed Cost+Operating Income

=1300+9800=11100

Sales=Variable Cost+Contribution Margin

=7400+11100=18500

Contribution Margin(%)=Contribution/Sales*100%=11100/18500*100%=60%

Working (Case c)

Variable Cost=Sales-Contribution

=10600-30=10570

Operating Income=Sales-total cost

=10600-13770= -3170

Contribution Margin(%)=Contribution Margin/Sales*100%=30/10600*100%=0.28% or 1%

Working (Case d)

Operating Income=Sales-total cost

=9450-8170=1280

Contribution=Fixed Cost+Operting Income

=2500+1280=3780

Variable Cost=Sales-Contribution

=9450-3780=5670

Contribution Margin(%)=Contribution/Sales*100%=3780/9450*100%=40%