Required: 1.  Calculate the contribution margin ratio. Note: Enter as a percent, rounded to the nearest whole number. fill in the blank 1 % 2.  Calculate the variable cost ratio. Note: Enter as a percent, rounded to the nearest whole number. fill in the blank 2 % 3.  Calculate the break-even sales revenue for Ashton. Note: Round your answer to the nearest dollar.

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 56P: Contribution Margin Ratio, Break-Even Sales, Operating Leverage Elgart Company produces plastic...
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Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue

The controller of Ashton Company prepared the following projected income statement:

Sales $88,000
Total variable cost 23,760
Contribution margin $64,240
Total fixed cost 43,800
Operating income $20,440

Required:

1.  Calculate the contribution margin ratio. Note: Enter as a percent, rounded to the nearest whole number.

fill in the blank 1 %

2.  Calculate the variable cost ratio. Note: Enter as a percent, rounded to the nearest whole number.

fill in the blank 2 %

3.  Calculate the break-even sales revenue for Ashton. Note: Round your answer to the nearest dollar.

$fill in the blank 3

4. How could Ashton increase projected operating income without increasing the total sales revenue?

Decrease the contribution margin ratio 

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