a. Segar Company budgets sales of $3,200,000, fixed costs of $700,000, and variable costs of $2,240,000. What is the contribution margin ratio for Segar Company? (Enter your answer as a whole number.) %b. If the contribution margin ratio for Domino Company is 35%, sales were $2,100,000, and fixed costs were $400,000, what was the income from operations?$

Question

Business

Skyler Stuart

26 January, 06:25

a. Segar Company budgets sales of $3,200,000, fixed costs of $700,000, and variable costs of $2,240,000. What is the contribution margin ratio for Segar Company? (Enter your answer as a whole number.) %b. If the contribution margin ratio for Domino Company is 35%, sales were $2,100,000, and fixed costs were $400,000, what was the income from operations?$

+3

Answers (1)

Know the Answer?

Tessa · Answer 1

a. 30%

b. $335,000

Explanation:

a. The computation of the contribution margin ratio is shown below:

Contribution margin ratio = (Contribution margin) : (Sales) * 100

where,

Contribution margin = Sales - Variable cost

= $3,200,000 - $2,240,000

= $960,000

And, the sales is $3,200,000

Now put these values to the above formula

So, the value would equal to

So, the Contribution margin ratio = ($960,000) : ($3,200,000) * 100 = 30%

b. The computation of the income from operations is shown below:

= Contribution margin - fixed cost

= $2,100,000 * 35% - $400,000

= $735,000 - $400,000

= $335,000