Variable costs as a percentage of sales for Protoveo Inc. are 65%, sales are $500,000, and fixed costs are $125,000. How much would operating income change if sales decrease by $10,000?

a. $3,500 increase

b. $3,250 increase

c. $3,500 decrease

d. $3,250 decrease

What is the contribution margin ratio of SuperGalaxy Enterprises with sales of $120,000, 65% of sales are variable costs, and operating income of $24,000?

a. 25%

b. 56%

c. 35%

d. 20%