Cost of goods sold $200,000.00
Gross margin $250,000.00
Other operating expenses $196,000.00
Operating income $54,000.00
$50,000 of cost of goods sold and $166,000 of operating expenses is fixed.
a. Compute contribution margin
b. Compute the contribution-margin percentage
c. Compute the break-even volume in sales dollars
d. Compute the current margin of safety
This solution is comprised of a detailed explanation to compute contribution margin.