This is the contribution margin at a sales volume of 3,000 units. The contribution margin minus fixed costs equals operating income.
This is the sales revenue multiplied by 55%. Since the contribution margin ratio is 45%, variable costs must be 55% of revenue. Thus, this is the total variable costs at a sales volume of 3,000 units.
Sales are $30 × 30,000 units, or $90,000. The contribution margin ratio is 45%, so the contribution margin is $90,000 × .45, or $40,500. The contribution margin of ?$40,500 minus fixed costs of $10,000 equals income of $30,500.
This is the revenue at a sales volume of 3,000 units. Revenue minus variable costs minus fixed costs equals operating income.
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