Using the contribution margin approach, find the contribution margin ratio for Consumer Products if the selling price per unit is $12, the variable cost per unit is $3, and the fixed costs are $8,040.
A) 25%
B) 50%
C) 75%
D) 100%

Question

Quizplus · Accepted Answer

The contribution margin per unit is calculated as the selling price per unit minus the variable cost per unit, which is $12 - $3 = $9. The contribution margin ratio is the contribution margin per unit divided by the selling price per unit, which is $9 / $12 = 0.75 or 75%.

Using the Contribution Margin Approach, Find the Contribution Margin Ratio