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.
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
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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