Question

g For Sunland Company, sales is $2600000, fixed expenses are $780000, and the contribution margin ratio is 36%. What are the total variable expenses?

Answer 1

Total variable expenses = $1,664,000

Step-by-step explanation:

The computation of the variable expenses is shown below:

As we know that

Contribution margin ratio = Contribution margin ÷ Sales

0.36 = Contribution margin ÷ $2,600,000

So, the contribution margin is

= $2,600,000 × 0.36

= $936,000

Now the contribution margin is

Contribution margin = Sales - variable cost

$936,000 = $2,600,000 - variable cost

So, the variable expense is

= $2,600,000 - $936,000

= $1,664,000