The following information is for Lyceum, Ltd.:

-The contribution-margin ratio is
A) 64.3 percent.
B) 55.6 percent.
C) 35.7 percent.
D) 44.4 percent.

Question

The following information is for Lyceum, Ltd.:
 
-The contribution-margin ratio is
A) 64.3 percent. 
B) 55.6 percent. 
C) 35.7 percent. 
D) 44.4 percent.

Quizplus · Accepted Answer

The contribution-margin ratio is calculated as (Sales - Variable Costs) / Sales. If the contribution-margin ratio is 35.7 percent, it means that 35.7 percent of each sales dollar contributes to covering fixed costs and generating profit.

The Following Information Is for Lyceum, Ltd