use the following information for the quick study below. (algo)\nthe following information applies to the…

use the following information for the quick study below. (algo)\nthe following information applies to the questions displayed below.\na manufacturer reports the following.\nsales $ 740,000\nvariable cost of goods sold 285,000\nfixed overhead 165,000\nvariable selling and administrative expenses 85,000\nfixed selling and administrative expenses 55,000\nqs 19 - 17 (algo) compute contribution margin ratio lo a1\ncompute the contribution margin ratio.\ncontribution margin ratio %

use the following information for the quick study below. (algo)\nthe following information applies to the questions displayed below.\na manufacturer reports the following.\nsales $ 740,000\nvariable cost of goods sold 285,000\nfixed overhead 165,000\nvariable selling and administrative expenses 85,000\nfixed selling and administrative expenses 55,000\nqs 19 - 17 (algo) compute contribution margin ratio lo a1\ncompute the contribution margin ratio.\ncontribution margin ratio %

Answer

Explanation:

Step1: Calculate total variable costs

Total variable costs = Variable cost of goods sold + Variable selling and administrative expenses Total variable costs = (285000 + 85000=$370000)

Step2: Calculate contribution margin

Contribution margin = Sales - Total variable costs Contribution margin = (740000 - 370000=$370000)

Step3: Calculate contribution margin ratio

Contribution margin ratio = (\frac{\text{Contribution margin}}{\text{Sales}}\times100%) Contribution margin ratio = (\frac{370000}{740000}\times 100% = 50%)

Answer:

50%