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28 August, 05:18

Forward Company makes and sells power tools. The budgeted sales are $480,000, the budgeted variable costs are $175,000, and the budgeted fixed costs are $260,000. What is the budgeted percentage contribution margin ratio? (Note: Round your answer to two decimal places.)

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  1. 28 August, 06:47
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    63.54% (Approx)

    Explanation:

    The computation of the budgeted percentage contribution margin ratio is shown below:-

    For computing the contribution margin ratio firstly we need to calculate the contribution margin in dollars

    Contribution margin = Sales - Variable cost

    = ($480,000 - $175,000)

    = $305,000

    Contribution margin ratio = Contribution margin : Sales

    = ($305,000 : $480,000)

    = 63.54% (Approx)
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