For Pierce Company, sales is $500,000, variable expenses are $340,000, and fixed expenses are $140,000. Pierce's contribution margin ratio is
A) 4%.
B) 28%.
C) 32%.
D) 68%.

Name: For Pierce Company, sales is $500,000, variable expenses are $340,000, and fixed expenses are $140,000. Pierce's contribution margin ratio is A) 4%. B) 28%. C) 32%. D) 68%.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Contribution Margin Ratio = (Sales - Variable Expenses) / Sales
= ($500,000 - $340,000)/$500,000
= 0.32 or 32%.
Therefore, the correct answer is C) 32%.

For Pierce Company, Sales Is $500,000, Variable Expenses Are $340,000