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A cement manufacturer has supplied the following data:

Tons of cement produced and sold 300,000
Sales revenue $1,004,000
Variable manufacturing expense $237,000
Fixed manufacturing expense $328,000
Variable selling and administrative expense $134,480
Fixed selling and administrative expense $98,000
Net operating income $206,520

The company's contribution margin ratio is closest to:_______

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facundobuzzetti

Answer:

Contribution margin ratio= 0.63

Explanation:

Giving the following information:

Sales revenue $1,004,000

Variable manufacturing expense $237,000

Variable selling and administrative expense $134,480

To calculate the contribution margin ratio, we need to use the following formula:

Contribution margin ratio= total contribution margin / sales

Contribution margin ratio= (1,004,000 - 237,000 - 134,480) / 1,004,000

Contribution margin ratio= 632,520 / 1,004,000

Contribution margin ratio= 0.63

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