(Answered) Question - contribution margin ratio variable cost ratio

Accounting

Question - Contribution Margin Ratio, Variable Cost Ratio, Break-Even Sales Revenue

The controller of Pelley Company prepared the following projected income statement:

Sales $95,000

Total variable cost 68,400

Contribution margin $26,600

Total fixed cost 14,000

Operating income $12,600

Required:

1. Calculate the contribution margin ratio.

2. Calculate the variable cost ratio.

3. Calculate the break-even sales revenue for Pelley.

4. CONCEPTUAL CONNECTION How could Pelley increase projected operating income without increasing the total sales revenue?

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