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Sumanth answered this

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59 answers

Contribution margin =sales-variable cost

Therefore sales=500000

Variable costs=cogs + sales commission+other operating costs

=200000+50000+20000=270000

Therefore contribution margin =500000-270000=230000

Contribution margin percentage =contribution/sales*100

=230000/500000*100=46%

Change in sales by increase in items sold=25% of sales

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3/2/2021 500,000 Revenues 200,000 Cost Of Goods Sold (all V... | Chegg.com
=500000*25% =125000
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Therefore increase in variable costs=125000*46% =57500
Practice 

There fore change in operating income=125000-57500-12000

=55500

He can decrease the variable costs and increase the sales volume.

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