Question

A manufacturer of tiling grout has supplied the following data: Kilograms produced and sold 390,000 Sales revenue$1,860,000 Variable manufacturing expense$951,000 Fixed manufacturing expense$248,000 Variable selling and administrative expense$333,000 Fixed selling and administrative expense$214,000 Net operating income$114,000 The company's contribution margin ratio is closest to: Multiple Choice 48.9% 82.1% 31.0% 75.2%

Answer 1

Answer:

   CMR  = 31%

Explanation:

Contribution margin ratio  (CMR) is the percentage of sales revenue that is earned as contribution.

Contribution margin ratio = contribution/sales revenue

Total contribution = Sales revenue - Variable cost

Total contribution = $1,860,000 - ( $951,000 + $333,000

                             =   $1,860,000-  $1,284,000

                             = $576,000

Contribution margin ratio = 576,000/1,860,000

                            = 31%

Contribution margin ratio=31%

Answer 2

Answer:

Correct option is "C"

Explanation:

Detailed calculations are attached below: