If Sales Are $820,000, Variable Costs Are 55% of Sales

question 22

Multiple Choice

If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?

• A) 45%
• B) 55%
• C) 62%
• D) 32%

---

Definitions:

Belief

An acceptance that something exists or is true, especially one without proof.

Working Poor

People who spend at least 27 weeks in the labor force but whose wages fall below the official poverty level.

Official Poverty Level

A government-defined threshold that measures the minimum amount of income required for individuals or families to meet their basic needs, used to determine eligibility for certain social services and benefits.

Welfare Class

A social group consisting of people who are receiving government assistance for the poor.