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:

. Calculate the contribution margin ratio.

. Calculate the variable cost ratio.

. Calculate the break-even sales revenue for Sandoval.

Exercise