Question

Young Company budgets sales of $970,000, fixed costs of $30,600, and variable costs of $135,800. What is the contribution margin ratio for Young Company

Answer 1

contribution margin ratio= 0.86

Step-by-step explanation:

Giving the following information:

Young Company budgets sales of $970,000

Variable costs of $135,800.

To calculate the contribution margin ratio, we need to use the following formula:

contribution margin ratio= contribution margin / sales

contribution margin ratio= (970,000 - 135,800) / 970,000

contribution margin ratio= 0.86