Hampton Company, a producer of computer disks, has the following information:

-The contribution margin ratio equals
A) revenue minus variable costs.
B) variable costs divided by revenue.
C) contribution margin divided by revenue.
D) variable costs divided by contribution margin.

Question

Hampton Company, a producer of computer disks, has the following information:
 
-The contribution margin ratio equals
A) revenue minus variable costs. 
B) variable costs divided by revenue. 
C) contribution margin divided by revenue. 
D) variable costs divided by contribution margin.

Quizplus · Accepted Answer

The contribution margin ratio is calculated by dividing the contribution margin (which is revenue minus variable costs) by revenue. Therefore, option C is the correct answer.

Hampton Company, a Producer of Computer Disks, Has the Following