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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:

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akiran007

Answer:

Contribution Margin Ratio= 342,650/$ 979,000 = 0.35 or 35%

Explanation:

Contribution Margin Ratio=  Contribution Margin/Sales revenue

Contribution Margin Ratio= Sales revenue Less Variable Costs/Sales revenue

Contribution Margin Ratio= $ 979,000 - $ 636,350 / $ 979,000

Contribution Margin Ratio= 342,650/$ 979,000 = 0.35 or 35%

Working

Sales revenue $ 979,000

Variable manufacturing expense $ 232,000

Less Variable selling and administrative expense $ 110,650

Contribution Margin                  $ 636,350

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