Contribution margin ratio
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Co has a contribution margin ratio of 25%. The Co. is considering a proposal that will increase sales by $100,000. What increase in profit can be expected assuming total costs increase by $20,000?
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Solution Summary
Solution explains how to calculated profit at given sales level using contribution margin ratio.
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Increase in sales =$100,000
Variable cost ratio = 100% - contribution margin ratio of 25%.=100%- ...
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