The contribution margin ratio is the portion of every sales dollar that contributes toward covering fixed costs and, ultimately, to profit.

Question

Quizplus · Accepted Answer

The contribution margin ratio is a measure of how much of each sales dollar is available to cover fixed costs and contribute to profits. It is calculated by dividing the contribution margin (sales revenue minus variable costs) by the total sales revenue.

The Contribution Margin Ratio Is the Portion of Every Sales