Evergreen Corporation Manufactures Circuit Boards and Is in the Process

question 17

Multiple Choice

Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget.The pro forma income statement for the current year is presented below. $$\begin{array} { | l | l | l | } \hline \text { Sales } & & \$ 3,500,000 \\\hline \text { Cost of sales: } & & \\\hline \text { Direct Material } & \$ 500,000 & \\\hline \text { Direct labor } & 250,000 & \\\hline \text { Variable Overhead } & 275,000 & \\\hline \text { Fiked Overhead } & \underline { 600,000 } & 1,625,000 \\\hline \text { Gross Profit } & & \$ 1,876,000 \\\hline \text { Selling and General \& Admin. Exp. } & & \\\hline \text { Variable } & 750,000 & \\\hline \text { Fiked } & 250,000 & 1,000,000 \\\hline \text { Operating Income } & & \$ 875,000 \\\hline\end{array}$$ The contribution margin ratio for the current year is:

• A) 53.6%.
• B) 49.3%.
• C) 46.4%.
• D) 25%.

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Definitions:

Altruism

The behavior of an individual that benefits another at its own expense, observed in various species as a part of social interaction.

Female Aphids

Asexual or sexual reproductive females of the aphid species, known for their ability to produce offspring without mating in some cases.

Territoriality

A behavioral pattern in animals involving the establishment and defense of a territory to claim exclusive use of resources within it.

Dominance Hierarchy

A social structure in animal groups where individuals are ranked according to their access to resources or dominance.