Question 2 (1 point) The Gasson Company sells three products, Product A, Product

Question

Question 2 (1 point)

The Gasson Company sells three products, Product A, Product B and Product C, and had sales of $1,000,000 during the month of June.

The company's overall contribution margin ratio was 37% and fixed expenses totaled $350,000.

Sales were:

Product A, $500,000;

Product B, $300,000; and

Product C, $200,000.

Traceable fixed costs were:

Product A, $120,000;

Product B, $100,000; and

Product C, $60,000.

The variable expenses of Product A were $300,000 and the variable expenses of Product B were $180,000.


The contribution margin ratio for Product C is:
1) 75%.
2) 69%.
3) 31%.
4) 25%.
show work please, i am having a problem understanding this

Explanation / Answer

             Total             Prod. A       Prod. B       Prod. C     
Rev.     $1,000,000   $500,000   $300,000   $200,000     in '000
VC          $630,000    $300,000   $180,000   $150,000  ($630-$300-180)
            (100% - 37%)  
        ________________________________________
Cont.      $370,000        $200,000     $120,000     $50,000
Cont. %  $370,000/1M   $200/500     $120/300    $50/200
                 37%                 40%           40%          25%
       ____________________________________

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