Last year, Mayes Company had a contribution margin of 30 percent. This year, fixed expenses are expected

Question:

Last year, Mayes Company had a of 30 percent. This year, fixed expenses are expected to remain at $120,000, and sales are expected to be $550,000, which is 10 percent higher than last year.

Required
What must the ratio be if the company wants to increase net income by $15,000 this year?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...