PART 2 : Show your calculation for the following questions on the spaceprovided.

Question

PART 2:

Show your calculation for the following questions on the spaceprovided. You can use additional paper if the space availableis not enough. Five points will be awarded for each correctanswer.

1.         The followingis Allison Corporation’s formal income statement for lastmonth:

           Sales                                       $800,000

           Less VariableExpenses            300,000

           ContributionMargin                 $500,000

           Less FixedExpenses                400,000

           NetIncome                             $100,000

The Company has no beginnings or ending inventories. TheCompany produced and sold 10,000 units last month. What is theCompany’s contribution margin ratio?

(a)               62.5%

(b)              160.0%

(c)               500%

(d)              20%

Explanation / Answer

500,000 / 10,000

50 / 80

Contribution Margin 500,000 Number of units sold 10,000 UnitContribution

500,000 / 10,000

50.00 SalesVolume 800,000.00 Unit SellingPrice 80.00 ContributionMargin Ratio

50 / 80

Contribution MarginRatio 62.50%

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.