Use the following information to determine the contribution margin ratio:$\begin{array} { | l r | }
\hline \text { Unit sales } & 50,000 \text { Units } \
\text { Unit selling price } & \$ 14.50 \
\text { Unit variable cost } & \$ 7.50 \
\text { Fixed costs } & \$ 204,000 \
\hline
\end{array}$
A) 24.5%.
B) 48.3%.
C) 34.1%.
D) 6.9%.
E) 51.7%.

Question

Use the following information to determine the contribution margin ratio:$\begin{array} { | l r | } 
\hline \text { Unit sales } & 50,000 \text { Units } \
\text { Unit selling price } & \$ 14.50 \
\text { Unit variable cost } & \$ 7.50 \
\text { Fixed costs } & \$ 204,000 \
\hline
\end{array}$
A) 24.5%.
B) 48.3%.
C) 34.1%.
D) 6.9%.
E) 51.7%.

Quizplus · Accepted Answer

Contribution margin ratio = (Unit selling price - Unit variable cost) / Unit selling price= (14.50 - 7.50) / 14.50= 7 / 14.50= 0.483= 48.3%

Use the Following Information to Determine the Contribution Margin Ratio