CONTRIBUTION MARGIN RATIO, VARIABLE COST RATIO, BREAK-EVEN SALES REVENUE
The controller of Sandoval Company prepared the following projected income statement:
|
Sales
|
$90,000
|
|
Less: Variable costs
|
72,000
|
|
Contribution margin
|
$18,000
|
|
Less: Fixed costs
|
6,900
|
|
Operating income
|
$11,100
|
Required:
1. Calculate the contribution margin ratio.
2. Calculate the variable cost ratio.
3. Calculate the break-even sales revenue for Sandoval.