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Lösungsschritte

1. Understand the question

   chapter 5 homework
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   last month when holiday creations, incorporated, sold 43,000 units, its sales, variable expenses, and fixed expenses were $172,000, $135,880, and $36,200, respectively.
   required:

   1. what is the companys contribution margin (cm) ratio?
   2. what is the companys variable expense ratio?

   note: do not round intermediate calculations.

   1. contribution margin ratio %
   2. variable expense ratio %

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2. Explanation

   Step1: Calculate total contribution margin

   $\text{Contribution Margin} = \text{Sales} - \text{Variable Expenses} = 172000 - 135880 = 36120$

   Step2: Compute CM ratio

   $\text{CM Ratio} = \frac{\text{Contribution Margin}}{\text{Sales}} \times 100 = \frac{36120}{172000} \times 100 = 21\%$

   Step3: Compute variable expense ratio

   $\text{Variable Expense Ratio} = \frac{\text{Variable Expenses}}{\text{Sales}} \times 100 = \frac{135880}{172000} \times 100 = 79\%$

3. Final answer
   1. Contribution margin ratio: 21%
   2. Variable expense ratio: 79%

Antwort

Question Analysis

OCR Text

chapter 5 homework
saved
help save & exit submit
1
0.7 points
last month when holiday creations, incorporated, sold 43,000 units, its sales, variable expenses, and fixed expenses were $172,000, $135,880, and $36,200, respectively.
required:
1. what is the companys contribution margin (cm) ratio?
2. what is the companys variable expense ratio?
note: do not round intermediate calculations.
1. contribution margin ratio %
2. variable expense ratio %
ebook
hint
print
references
mc graw hill
prev 1 of 12 next

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