Dean Computer Services provides services to corporate and individual customers.

Question

Dean Computer Services provides services to corporate and individual customers. During the month of June, the corporate business segment provided services to 300 customers and earned $80,000 in revenue. The individual business segment provided services to 200 customers and earned $45,000 in revenue. The variable costs for the corporate and individual business segments amounted to $32,000 and $25,000, respectively. In addition, the fixed costs of the company amounted to $8,500. The contribution margin ratios of the corporate segment and individual segment are ________, respectively. (Round your answers two decimal places.)

Select one:

A. 40.00% and 55.56%

B. 106.67% and 25.00%

C. 60.00% and 44.44%

D. 40.00% and 44.44%

Explanation / Answer

Contribution margin ratio = Sales - Variable costs / Sales * 100

1) Corporate segment = 80000 - 32000 / 80000 * 100 = 48000 / 80000 * 100 = 60 %

2) Individual segment = 45000 - 25000 / 45000 * 100 = 20000 / 45000 * 100 = 44.44 %

Conclusion:- The contribution margin ratios of the corporate segment and individual segment are 60 % and 44.44 % respectively. [ Option C].

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

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