Schister Systems uses the following data in its Cost-Volume-Profit analyses: What is total contribution margin if sales volume increases by 20%?
A)$80,000
B)$158,400
C)$200,000
D)$144,000

Question

Schister Systems uses the following data in its Cost-Volume-Profit analyses:  What is total contribution margin if sales volume increases by 20%?
A)$80,000 
B)$158,400 
C)$200,000 
D)$144,000

Quizplus · Accepted Answer

CM ratio = Contribution margin ÷ Sales = $120,000 ÷ $400,000 = 0.30
Contribution margin = CM ratio × Sales
Contribution margin = 0.30 × (1.2 × $400,000)= $144,000

Schister Systems Uses the Following Data in Its Cost-Volume-Profit Analyses