Given the following projected contribution income statement for the coming year: Sales (100 units) P 10,000 Variable costs 3,000 Contribution margin 7,000 Fixed cost 4,000 Operating income 3,000 What is the contribution margin ratio?

Given the following projected contribution income statement for the coming year: Sales (100 units) P 10,000 Variable costs 3,000 Contribution margin 7,000 Fixed cost 4,000 Operating income 3,000 What is the contribution margin ratio?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 3MC: A companys product sells for $150 and has variable costs of $60 associated with the product. What is...

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Question

Given the following projected contribution income statement for the coming year:

Sales (100 units) P 10,000

Variable costs 3,000

Contribution margin 7,000

Fixed cost 4,000

Operating income 3,000

What is the contribution margin ratio?

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Definition Definition Basic financial report that forecasts estimated profits, revenue, and expenses for the company in the coming year or months. Budgeted income statements are helpful for companies in planning for the future, making better decisions, and allocating available resources more effectively and efficiently.

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