Figure 4-4. Yerke Company makes jungle gyms and tree houses for children.For jungle gyms,the price is $120 and variable expenses are $90 per unit.For tree houses,the price is $200 and variable expenses are $100.Total fixed expenses are $253,750.Last year,Yerke sold 12,000 gyms and 4,000 tree houses.
Refer to Figure 4-4.Now suppose that Yerke expects tree house demand to increase from 4,000 to 8,000 units.What is the new contribution margin ratio (rounded to two decimal places)?

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The Answer of Figure 4-4. Yerke Company makes jungle gyms and tree houses for children.For jungle gyms,the price is $120 and variable expenses are $90 per unit.For tree houses,the price is $200 and variable expenses are $100.Total fixed expenses are $253,750.Last year,Yerke sold 12,000 gyms and 4,000 tree houses.
Refer to Figure 4-4.Now suppose that Yerke expects tree house demand to increase from 4,000 to 8,000 units.What is the new contribution margin ratio (rounded to two decimal places)?