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5 January, 22:44

Perfect Clean, Inc. provides housekeeping services. The following financial data have been provided.

Service Revenue

$80,000

Cleaning Supplies Used

22,000

Wages Expense

19,350

Office Rent Expense

5,150

Depreciation Expense-Machinery

550

Calculate the contribution margin and the contribution margin ratio. (Round your contribution margin to the nearest dollar, and your contribution margin ratio to two decimal places.)

A) $38,650; 48.31% B) $74,850; 93.56%

C) $60,650; 75.81% D) $32,950; 41.19%

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Answers (1)
  1. 6 January, 01:51
    0
    A) $38,650; 48.31%

    Explanation:

    The computation of the contribution margin and the contribution margin ratio is shown below:

    Contribution margin = Service Revenue - Cleaning Supplies Used - wages expense

    = $80,000 - $22,000 - $19,350

    = $38,650

    The variable cost is Cleaning Supplies Used + wages expense

    And, the contribution margin ratio equals to

    = (Contribution margin : sales) * 100

    = ($38,650 : $80,000) * 100

    = 48.31%
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Home » Business » Perfect Clean, Inc. provides housekeeping services. The following financial data have been provided. Service Revenue $80,000 Cleaning Supplies Used 22,000 Wages Expense 19,350 Office Rent Expense 5,150 Depreciation Expense-Machinery 550 Calculate
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