A manufacturer of tiling grout has supplied the following data: The company's contribution margin ratio is closest to:

Question

A manufacturer of tiling grout has supplied the following data:  The company's contribution margin ratio is closest to:

Quizplus · Accepted Answer

To find the contribution margin ratio, we need to divide the contribution margin (sales - variable costs) by the sales. 
Using the data provided: 
Sales = $500,000 
Variable Costs = $345,000 
Contribution Margin = $155,000

Contribution Margin Ratio = (Contribution Margin / Sales) x 100% 
= (155,000 / 500,000) x 100% 
= 31.0%

Therefore, the closest contribution margin ratio for the company is 31.0%, which corresponds to answer choice C.

A Manufacturer of Tiling Grout Has Supplied the Following Data