Use the contribution margin ratio to project operating income (or loss) if revenues are $ 520.000 and if they are $ 1.040.000. First, select the labels to calculate projected operating income. Then, calculate projected income (or loss) if revenues are $ 520.000. Finally, calculate projected income (or loss) if revenues are $ 1.040.000. (Enter the contribution margin ratio as a whole percent. Enter losses with a minus sign or parentheses.)

Question

Dayanara Beasley

Business

4 July, 18:41

Use the contribution margin ratio to project operating income (or loss) if revenues are $ 520.000 and if they are $ 1.040.000. First, select the labels to calculate projected operating income. Then, calculate projected income (or loss) if revenues are $ 520.000. Finally, calculate projected income (or loss) if revenues are $ 1.040.000. (Enter the contribution margin ratio as a whole percent. Enter losses with a minus sign or parentheses.)

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Mario Payne · Answer 1

Instructions are listed below.

Explanation:

Giving the following information:

Use the contribution margin ratio to project operating income (or loss) if revenues are $ 520.000 and if they are $ 1.040.000.

We weren't provided with the contribution margin ratio. But, I will give the contribution margin formula and an example to guide an answer.

Contribution margin ratio = (selling price - unitary varaible cost) / selling price

For example:

Contribution margin ratio = 0.35

Operating income = sales*contribution margin ratio

Operating income = 520,000*0.35 = $182,000

Operating income = 1,040,000*0.35 = $364,000