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Can you confirm if my answers are correct? Select Yes or No from the following ratios that can be computed by contribution margin: No Price
Can you confirm if my answers are correct?
Select "Yes or No" from the following ratios that can be computed by contribution margin: No Price - unit variable cost Yes Unit contribution margin/Price Yes Total contribution margin/Price No Total contribution margin/Sales No (Price - unit variable cost)/Price Yes (Price - unit variable cost)/Sales Price/(Price - unit variable cost) Yes (1 - variable cost ratio)/Price Yes Price/Unit contribution margin (1 - variable cost ratio) Yes Example: Kalman Company makes vases. Last year, Kalman sold 5,000 vases at a price of $12 and had unit variable cost of $3. Total fixed costs were $37,800. The contribution margin ratio was 0.75 . Breakeven sales were $ No the original Suppose Kalman Company had a contribution margin ratio of 40%, the breakeven sales dollars would be higher than scenario. Breakeven sales dollars = Total fixed cost/contribution margin ratio = $31,500/0.4 = $78,750 Now suppose Kalman Company had a contribution margin ratio of 80%, the breakeven sales dollars would be higher than scenario. the original Breakeven sales dollars = Total fixed cost/contribution margin ratio = $31,500/0.8 = $39,375Step by Step Solution
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