Using the contribution margin approach,find the contribution margin ratio for Consumer Products if the selling price per unit is $15,the variable cost per unit is $7.50,and the fixed costs are $8,000.
A)25%
B)75%
C)50%
D)100%

Question

Quizplus · Accepted Answer

Contribution margin ratio is calculated by dividing the contribution margin (selling price per unit minus variable cost per unit) by the selling price per unit.

Contribution Margin = Selling Price per Unit - Variable Cost per Unit
= $15 - $7.50
= $7.50

Contribution Margin Ratio = (Contribution Margin / Selling Price per Unit) x 100%
= ($7.50 / $15) x 100%
= 50%

Therefore, the correct answer is C) 50%.

Using the Contribution Margin Approach,find the Contribution Margin Ratio for Consumer