The contribution margin ratio is:
A) the contribution margin shown as a percentage of revenue.
B) determines the sales dollars required to achieve a desired profit.
C) total contribution margin divided by total sales and then multiplied by 100.
D) all of the above.

Question

Quizplus · Accepted Answer

The contribution margin ratio is the contribution margin shown as a percentage of revenue. It is also used to determine the sales dollars required to achieve a desired profit. The formula for the contribution margin ratio is total contribution margin divided by total sales and then multiplied by 100. Therefore, all of the options listed are correct.

The Contribution Margin Ratio Is