Assume sales are $750,000, variable costs are 70% of sales, and income from operations is $100,000. What

Question:

Assume sales are $750,000, variable costs are 70% of sales, and income from operations is $100,000. What is the contribution margin ratio and fixed cost, respectively?

1. 30% and $125,000

2. 70% and $125,000

3. 70% and $625,000

4. None of the above

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...