# 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 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...

Fantastic news! We've Found the answer you've been seeking!

## Step by Step Answer:

**Related Book For**

## Financial and Managerial Accounting

**ISBN:** 978-1285078571

12th edition

**Authors:** Carl S. Warren, James M. Reeve, Jonathan Duchac