A company has contribution margin per unit of $45 and a contribution margin ratio of 40%. What is the unit selling price?
A) $75.00
B) $112.50
C) $18.00
D) Cannot be determined.

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as the contribution margin per unit divided by the selling price per unit. Therefore, $45 / Selling Price = 0.40. Solving for the selling price gives $112.50.

A Company Has Contribution Margin Per Unit of $45 and a Contribution