Cost Accounting (15th Edition)

Published by Prentice Hall
ISBN 10: 0133428702
ISBN 13: 978-0-13342-870-4

Chapter 3 - Cost-Volume-Profit Analysis - Assignment Material - Exercises - Page 95: 3-24(1)

Answer

Contribution Margin Percentage = (1,500,000 - 780,000) / 1,500,000 * 100 Contribution Margin Percentage = 48%

Work Step by Step

Contribution Margin Percentage = (Contribution Margin / Revenues) * 100 Contribution Margin Percentage = (Revenues - Variable Costs) / Revenues * 100 Contribution Margin Percentage = (1,500,000 - Variable Costs) / 1,500,000 * 100 Given the breakeven point, Variable Costs = 1,500,000 - Fixed Costs = 1,500,000 - 720,000 = 780,000
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