he following CVP income statements are available for Blanc Company and Noir Company. Blanc Company Noir Company Sales $485,000 $485,000 Variable costs 291,000 242,500 Contribution margin 194,000 242,500 Fixed costs 186,240 234,740 Net income $7,760 $7,760 (a1) Calculate Contribution margin ratio. (Round answers to 2 decimal places, e. g. 0.32.) Contribution Margin Ratio Blanc Company Noir Company

contribution margin ratio= 0.45

Explanation:

Giving the following information:

Blanc Company Noir Company

Company Sales $485,000 $485,000

Variable costs 291,000 242,500

To calculate the contribution margin ratio, first, we need to determine the sales proportion:

Blanc= 485,000/970,000= 0.5

Noir= 485,000/970,000= 0.5

Now, we need to use the following formula:

contribution margin ratio= Weighted average contribution margin/ Weighted average sales

Weighted average contribution margin= (weighted average sales - weighted average variable cost)

Weighted average contribution margin= (0.5*485,000 + 0.5*485,000) - (0.5*291,000 + 0.5*242,500)

Weighted average contribution margin= 218,250

contribution margin ratio= 218,250 / 485,000

contribution margin ratio= 0.45

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