Asked by Jessica Sheppard on Jul 15, 2024
Verified
The company's contribution margin ratio is closest to:
A) 28.9%
B) 63.9%
C) 71.1%
D) 36.1%
Contribution Margin Ratio
A metric that reveals the percentage of sales revenue that exceeds variable costs and contributes to covering fixed costs and generating profit.
- Acquire knowledge about the contribution margin ratio and its role in enhancing profitability.
Verified Answer
IG
Israel GarciaJul 22, 2024
Final Answer :
D
Explanation :
Contribution margin = Sales - Variable expenses
= $2,736,000 - ($1,349,000 + $399,000)
= $2,736,000 - $1,748,000 = $988,000
CM ratio = Contribution margin ÷ Sales = $988,000 ÷ $2,736,000 = 0.361
= $2,736,000 - ($1,349,000 + $399,000)
= $2,736,000 - $1,748,000 = $988,000
CM ratio = Contribution margin ÷ Sales = $988,000 ÷ $2,736,000 = 0.361
Learning Objectives
- Acquire knowledge about the contribution margin ratio and its role in enhancing profitability.
Related questions
The Company's Contribution Margin Ratio Is Closest To
The Company's Contribution Margin Ratio Is Closest To
Steffen Corporation Has Three Products with the Following Characteristics ...
If the Company Sells 9,100 Units, Its Total Contribution Margin ...
If the Company Sells 4,500 Units, Its Total Contribution Margin ...