Easy Cook Company manufactures two products: toaster ovens and bread machines. The following data are available:
$$\begin{array} { | l | r | r | }
\hline & \text { Toaster Ovens } & \text { Bread Machines } \
\hline \text { Sale price } & \$ 60 & \$ 135 \
\hline \text { Variable costs } & \$ 38 & \$ 62 \
\hline
\end{array}$$ What is the contribution margin ratio for toaster ovens?

Question

Easy Cook Company manufactures two products: toaster ovens and bread machines. The following data are available:
$$\begin{array} { | l | r | r | } 
\hline & \text { Toaster Ovens } & \text { Bread Machines } \
\hline \text { Sale price } & \$ 60 & \$ 135 \
\hline \text { Variable costs } & \$ 38 & \$ 62 \
\hline
\end{array}$$ What is the contribution margin ratio for toaster ovens?

Quizplus · Accepted Answer

Contribution margin ratio = (Sale price - Variable costs) / Sale price= (60 - 38) / 60= 22 / 60= 0.367= 36.7%

Easy Cook Company Manufactures Two Products: Toaster Ovens and Bread