If the contribution margin ratio is 32%, this means that every $1.00 of sales will contribute $0.32 towards covering fixed costs and generating a profit.

Question

Quizplus · Accepted Answer

The contribution margin ratio is the percentage of sales revenue that is available to cover fixed costs and contribute to net income. In this case, a contribution margin ratio of 32% means that for every $1.00 of sales, $0.32 is available to cover fixed costs and contribute to profit.

If the Contribution Margin Ratio Is 32%, This Means That