Answer:
a. 30%
b. $335,000
Explanation:
a. The computation of the contribution margin ratio is shown below:
Contribution margin ratio = (Contribution margin) ÷ (Sales) × 100
where,
Contribution margin = Sales - Variable cost
= $3,200,000 - $2,240,000
= $960,000
And, the sales is $3,200,000
Now put these values to the above formula
So, the value would equal to
So, the Contribution margin ratio = ( $960,000) ÷ ($3,200,000 ) × 100 = 30%
b. The computation of the income from operations is shown below:
= Contribution margin - fixed cost
= $2,100,000 × 35% - $400,000
= $735,000 - $400,000
= $335,000
