Question - Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue
The controller of Pelley Company prepared the following projected income statement:
Sales $95,000
Total variable cost 68,400
Contribution margin $26,600
Total fixed cost 14,000
Operating income $12,600
Required:
1. Calculate the contribution margin ratio.
2. Calculate the variable cost ratio.
3. Calculate the break-even sales revenue for Pelley.
4. CONCEPTUAL CONNECTION How could Pelley increase projected operating income without increasing the total sales revenue?