Bryan company budgets sales of 1,800,000, fixed costs of 1,000,000 and variable costs of 1,080,000. what is the contribution margin ratio for Bryan Company
CMR= Contribution Margin/ Sales
Contibution Margin=Sales-Variable Costs
Answer= ((1800000-1080000)/1800000)*100%
40%
To calculate the contribution margin ratio, you need to subtract the variable costs from the sales and then divide it by the sales.
Contribution Margin = Sales - Variable Costs
Contribution Margin = $1,800,000 - $1,080,000
Contribution Margin = $720,000
Contribution Margin Ratio = Contribution Margin / Sales
Contribution Margin Ratio = $720,000 / $1,800,000
Contribution Margin Ratio = 0.4 or 40%
Therefore, the contribution margin ratio for Bryan Company is 40%.
To calculate the contribution margin ratio for Bryan Company, you need to know the formula:
Contribution Margin Ratio = (Sales - Variable Costs) / Sales
Given the information provided:
Sales = $1,800,000
Variable Costs = $1,080,000
Let's plug in these values into the formula:
Contribution Margin Ratio = ($1,800,000 - $1,080,000) / $1,800,000
Now, let's calculate it:
Contribution Margin Ratio = $720,000 / $1,800,000
Divide $720,000 by $1,800,000:
Contribution Margin Ratio = 0.4
The contribution margin ratio for Bryan Company is 0.4, or 40%.