Last year, Terrific Copying had total revenue of $475 000, while operating at 60% of capacity. The total of its variable cost is $150 000. Fixed costs were $180 000. What is Terrific's contribution rate?
A) 62.1%
B) 16.7%
C) 20%
D) 60%
E) 68.4%

Question

Quizplus · Accepted Answer

The contribution rate is calculated as (Revenue - Variable Costs) / Revenue. Here, it is ($475,000 - $150,000) / $475,000 = $325,000 / $475,000 = 68.4%.

Last Year, Terrific Copying Had Total Revenue of $475 000