If sales total $1,000,000, fixed costs total $200,000, and variable costs are 55% of the sales, the contribution margin ratio is 55%.

Name: If sales total $1,000,000, fixed costs total $200,000, and variable costs are 55% of the sales, the contribution margin ratio is 55%.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Sales - Variable Costs) / Sales. Here, variable costs are 55% of sales, so the contribution margin ratio is 1 - 0.55 = 0.45 or 45%.

If Sales Total $1,000,000, Fixed Costs Total $200,000, and Variable