Fletcher Company has three products with the following characteristics:
$\begin{array} { | l | r | r | r | }
\hline & \text { Product A } & \text { Product B } & \text { Product C } \
\hline \begin{array} { l }
\text { Monthly sales in } \
\text { dollars }
\end{array} & \$ 60,000 & \$ 80,000 & \$ 100,000 \
\hline \begin{array} { l }
\text { Contribution margin } \
\text { ratio }
\end{array} & 20 \% & 40 \% & 16 \% \
\hline
\end{array}$Fixed Costs = $30,000 per month.

-What is the overall contribution margin ratio for the company as a whole,rounded to the nearest tenth of a percent?
A) 25.3%.
B) 75.0%.
C) 25.0%.
D) 28.5%.

Question

Fletcher Company has three products with the following characteristics:
$\begin{array} { | l | r | r | r | } 
\hline & \text { Product A } & \text { Product B } & \text { Product C } \
\hline \begin{array} { l } 
\text { Monthly sales in } \
\text { dollars }
\end{array} & \$ 60,000 & \$ 80,000 & \$ 100,000 \
\hline \begin{array} { l } 
\text { Contribution margin } \
\text { ratio }
\end{array} & 20 \% & 40 \% & 16 \% \
\hline
\end{array}$Fixed Costs = $30,000 per month.

-What is the overall contribution margin ratio for the company as a whole,rounded to the nearest tenth of a percent?
A) 25.3%.
B) 75.0%.
C) 25.0%.
D) 28.5%.

Quizplus · Accepted Answer

To find the overall contribution margin ratio for the company, first calculate the total contribution margin in dollars and then divide by the total sales in dollars. The contribution margin for each product is: Product A: $60,000 * 20% = $12,000 Product B: $80,000 * 40% = $32,000 Product C: $100,000 * 16% = $16,000 Total contribution margin = $12,000 + $32,000 + $16,000 = $60,000 Total sales = $60,000 + $80,000 + $100,000 = $240,000 Overall contribution margin ratio = ($60,000 / $240,000) * 100 = 25%

Fletcher Company Has Three Products with the Following Characteristics Fixed Costs = $30,000 Per Month