Question

Contribution Margin Ratio a. Young Company budgets sales of $890,000, fixed costs of $26,000, and variable costs of $115,700. What is the contribution margin ratio for Young Company

Answer 1

87 %

Step-by-step explanation:

contribution margin ratio = Contribution ÷ Sales

therefore,

contribution margin ratio = ($890,000 - $115,700) ÷ $890,000

= 0.87 or 87 %

The contribution margin ratio for Young Company is 87 %.