Companyhas prot s Price per unit Variable cost per unit Fixe

Companyhas prot s Price per unit Variable cost per unit Fixed costs per month $%4 $17,00 What is the contribution margin ratio? A) 18% B) 70% C) 48% D) 33%

Solution

Contribution margin=Sales-Variable costs

=(40-12)=$28/unit

Hence Contribution margin ratio=Contribution margin/Sales

=(28/40)

which is equal to

=70%