Cross Creek Clinic has revenue totaling $200,000. The clinic has costs totaling $100,000. Of this amount, 60% is variable cost and 40% is fixed cost. What is the clinic's contribution margin, expressed in dollars?

Question

Johan

Business

7 June, 09:42

Cross Creek Clinic has revenue totaling $200,000. The clinic has costs totaling $100,000. Of this amount, 60% is variable cost and 40% is fixed cost. What is the clinic's contribution margin, expressed in dollars?

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Answers (1)

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Darnell Barker · Answer 1

Contribution Margin = $140,000

Explanation:

Giving the following information:

Cross Creek Clinic has revenue totaling $200,000. The clinic has costs totaling $100,000. Of this amount, 60% is a variable cost and 40% is fixed cost.

To calculate the contribution margin we need to use the following formula:

Contribution margin = total sales - total variable cost

CM = 200,000 - (100,000*0.6) = $140,000