Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below.

Sales				ps	3,500,000
Cost of sales:
direct material	ps	500,000
Direct labour		250.000
Variable Overhead		275.000
Fixed overhead		600.000			1.625.000
Gross profit				ps	1,875,000
Sales and General and Admin. Exp.
Variable		750.000
Fixed		250.000			1,000,000
operating income				ps	875,000

Calculate contribution margin ratio for the current year.

Answer rating: 100% (QA)

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