Refer to the data in PE 21-11. Compute the contribution margin ratio and the variable cost ratio. Data from PE 21-11 Loeffel Company sells desks for $550 each. Th e variable cost per desk is $375. The companys monthly fixed costs are $75,000. Prepare a contribution margin income statement for a month in which the company sells 550 desks.

Chapter 21, Practice Exercises #12

Refer to the data in PE 21-11. Compute the contribution margin ratio and the variable cost ratio.

Data from PE 21-11

Loeffel Company sells desks for $550 each. Th e variable cost per desk is $375. The company’s monthly fixed costs are $75,000. Prepare a contribution margin income statement for a month in which the company sells 550 desks.

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...