If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 60%.

Name: If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 60%.
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Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Sales - Variable Costs) / Sales. Given that variable costs are 60% of sales, the contribution margin ratio would actually be 40% (100% - 60%).

If Sales Total $2,000,000, Fixed Costs Total $800,000, and Variable