Compute the contribution margin ratio for the toy gun, Accounting Basics

Compute the contribution margin ratio for the toy gun

Kiltop Company produces a toy dart gun. The projected income statement for the coming year follows:

Sales                                                                 $ 480,000
Less: Variable costs    ( 249,600)
Contribution margin            $ 230,400
Less: Fixed costs                                              ( 180,000)
Operating income                 $   50,400

a. Compute the contribution margin ratio for the toy gun.
b. How much revenue must Kiltop earn in order to breakeven?
c. What volume of sales must be earned if Kiltop wants to earn an after-tax income equal to 8% of sales? Assume that the tax rate is 34%.

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Accounting Basics: Compute the contribution margin ratio for the toy gun

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Accounting Basics: Compute the contribution margin ratio for the toy gun

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Accounting Basics: Compute the contribution margin ratio for the toy gun

Reference No:- TGS0670804

Recent Questions Asked Accounting Basics

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