Question

Schister Systems uses the following data in its Cost-Volume-Profit analyses: Total Sales $ 400,000 Variable expenses 280,000 Contribution margin 120,000 Fixed expenses 100,000 Net operating income $ 20,000 What is total contribution margin if sales volume increases by 20%

Answer 1

Contribution margin= 144,000

Step-by-step explanation:

Giving the following information:

Total Sales $ 400,000

Variable expenses 280,000

Contribution margin 120,000

To calculate the new contribution margin, we need to increase sales and variable cost by 20%

Total sales= 400,000*1.20= 480,000

Variable expense= 280,000*1.2= (336,000)

Contribution margin= 144,000