Hardage Company has a contribution margin per unit of $15 and a contribution margin ratio of 60%.How much is the selling price of each unit?
A)$25
B)$37.50
C)$9
D)Cannot be determined without more information.

Question

Quizplus · Accepted Answer

Using the formula for contribution margin ratio:
Contribution Margin Ratio = Contribution Margin / Sales Price
60% = $15 / Sales Price
Sales Price = $15 / 60%
Sales Price = $25

Hardage Company Has a Contribution Margin Per Unit of $15