What is the formula for calculating contribution margin ratio?
A) Contribution margin/net income
B) Contribution margin/fixed costs
C) Contribution margin/desired profit
D) Contribution margin/sales

Question

Quizplus · Accepted Answer

The formula for calculating contribution margin ratio is contribution margin divided by sales. Therefore, the correct choice is option D. Option A is the formula for calculating profit margin ratio, option B is not relevant to calculating contribution margin ratio, and option C is the formula for calculating the required sales to achieve a desired profit.

What Is the Formula for Calculating Contribution Margin Ratio