Stephen Company has the following data for its three stores last year:

	A	B	C
Contribution margin ratio	?	20%	20%
Contribution margin	?	$130,600	?
Variable expenses	$226,050	?	$260,000
Variable expenses as a percentage of sales	55%	?	?

Given the above data, the total company sales were

	$1,514,000
	$1,589,000
→	$1,389,000

	A	B	C
Contribution margin ratio		20%	20%
Contribution margin		$130,600
Variable expenses	$226,050		$260,000
Variable expenses as a percentage of sales	55%
Sales	?

Segment A Variable expense ratio = Segment A Variable expenses ÷ Segment A Sales

0.55 = $226,050 ÷ Segment A Sales

Segment A Sales = $226,050 ÷ 0.55 = $411,000

 

	A	B	C
Contribution margin ratio		20%	20%
Contribution margin		$130,600
Variable expenses	$226,050		$260,000
Variable expenses as a percentage of sales	55%
Sales	$411,000	?

Segment B CM ratio = Segment B Contribution margin ÷ Segment B Sales

0.20 = $130,600 ÷ Segment B Sales

Segment B Sales = $130,600 ÷ 0.20 = $653,000

 

	A	B	C
Contribution margin ratio		20%	20%
Contribution margin		$130,600
Variable expenses	$226,050		$260,000
Variable expenses as a percentage of sales	55%
Sales	$411,000	$653,000

Segment C CM ratio = 1 - Segment C Variable expense ratio

Segment C Variable expense ratio = 1 - Segment C CM ratio = 1 - 0.20 = 0.80

Segment C Variable expense ratio = Segment C Variable expenses ÷ Segment C Sales

Segment C Sales = Segment C Variable expenses ÷ Segment C Variable expense ratio

= $260,000 ÷ 0.80 = $325,000

 

	A	B	C
Contribution margin ratio	?	20%	20%
Contribution margin	?	$130,600	?
Variable expenses	$226,050	?	$260,000
Variable expenses as a percentage of sales	55%	?	?
Sales	$411,000	$653,000	$325,000

Total sales = $411,000 + $653,000 + $325,000 = $1,389,000