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Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units):
Sales ---------------------22,400
Variable Expenses -------12,800
Contribution Margin -----9,600
Fixed Expenses -----------7,968
Net Operating Income ---1,632

What is the contribution margin ratio?

Respuesta :

facundobuzzetti

Answer:

CM ratio= 0.429= 42.9%

Explanation:

Giving the following information:

Sales= 22,400

Variable Expenses= 12,800

Contribution Margin= 9,600

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

CM ratio= (total sales - total variable cost) / total sales

CM ratio= (22,400 - 12,800) / 22,400

CM ratio= 0.429= 42.9%

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