A cement manufacturer has supplied the following data: Tons of cement produced and sold 275,000 Sales...

A cement manufacturer has supplied the following data:


Tons of cement produced and sold		275,000
Sales revenue	$	979,000
Variable manufacturing expense	$	232,000
Fixed manufacturing expense	$	313,000
Variable selling and administrative expense	$	110,650
Fixed selling and administrative expense	$	93,000
Net operating income	$	230,350

The company's contribution margin ratio is closest to:

Multiple Choice

44.3%
65.0%
68.0%
23.5%

Expert Solution

	Computation of company's contribution margin ratio :-

	Particulars		Total
	Sales revenue		$ 979,000
Less:	Variable manufacturing expenses		$ 232,000
Less:	Variable Selling and administrative expenses		$ 110,650
	Contribution margin		$ 636,350


	Contribution margin ratio	=	Contribution margin	×100
	Contribution margin ratio	=	Sales revenue	×100
		=	$636,350	×100
			$979,000	×100
		=	65.0%

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ekkarill92 answered 1 year ago

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