Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the contribution rate.
A) 22%
B) 34%
C) 43%
D) 53%
E) 57%

Question

Quizplus · Accepted Answer

The contribution rate is calculated as 100% minus the variable cost percentage. Since the variable costs are 43% of sales, the contribution rate is 100% - 43% = 57%.

Ace Corporation's Variable Costs Are Equal to 43% of Sales