Bloom Company predicts it will incur fixed costs of $160,000 and earn income of $164,000 in the next period. Its expected contribution margin ratio is 25%.

 Bloom Company predicts it will incur fixed costs of $160,000 and earn income of $164,000 in the next period. Its expected contribution margin ratio is 25%.
 
1. Compute the amount of expected total dollar sales.

2. Compute the amount of expected total variable costs.



Explanation
2.
(Alternatively: $1,296,000 in sales × [1 − 0.25 CM ratio] = $972,000)