If the contribution margin ratio for france company is 45%, sales were $425,000, and fixed costs were $100,000, what was the income from operations?

a. $191,250

b. $233,750

c. $133,750

d. $91,250

d. $91,250

Explanation:

We can calculate variable costs by using the contribution margin ratio formula.

Contribution Margin Ratio = Sales revenue Less Variable Costs/Sales revenue

45% = $ 425,000 - Variable Costs / $ 425,000

45% * $425,000 = $ 425,000 - Variable Costs

$ 191250 = $ 425,000 - Variable Costs

Variable Costs = $ 425,000 - $ 191250

Variable Costs = $ 233750

Sales $ 425,000

Variable Costs 233750

Fixed Costs = $ 100,000

Income from Operations = $ 91250