The formula for the contribution margin ratio is
A)Contribution margin divided by sales
B)Contribution margin divided by net income
C)Contribution margin divided by gross profit
D)Contribution margin divided by sales less variable costs

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated by dividing the contribution margin by sales, which shows the percentage of each sales dollar that contributes to covering fixed costs and generating profit.

The Formula for the Contribution Margin Ratio Is