Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 21

Montross Seating manufactures desk chairs for commercial distribution. Each chair is produced at a cost of $15 and sold for $25. What is the contribution margin ratio for desk chairs?

Step 1 of 2

Contribution Margin Ratio

The contribution margin ratio is defined as the contribution of the company expressed in percentage, where the contribution margin is selling price per unit less the variable costs per unit.