The contribution margin ratio is:
A) Total variable cost divided by total revenue
B) Total contribution margin divided by total revenue
C) The same as the margin of safety
D) Total fixed costs divided by price minus variable cost

Question

Quizplus · Accepted Answer

The contribution margin ratio is the percentage of each dollar of revenue that remains after variable costs have been paid. It is calculated by dividing the total contribution margin (total revenue minus total variable costs) by total revenue. So, option B is the correct answer.

The Contribution Margin Ratio Is