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If sales are 90,000 and variable cost to sales is 75%, contribution is
Question

If sales are 90,000 and variable cost to sales is 75%, contribution is

A.

Rs. 21,500

B.

Rs. 22,500

C.

Rs. 23,500

D.

Rs. 24,500

Correct option is B

Calculate the Variable Cost:

Variable Cost = Sales × Variable Cost to Sales Ratio

Variable Cost = ₹90,000 × 75% = ₹67,500

Calculate the Contribution:

Contribution = Sales - Variable Cost

Contribution = ₹90,000 - ₹67,500 = ₹22,500

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