Fixed Company produces a single product selling for $30 per unit. Variable costs are $12 per unit and total fixed costs are $4,000. What is the contribution margin ratio?
A) 1.67
B) 2.50
C) 0.40
D) 0.60

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Selling Price per Unit - Variable Cost per Unit) / Selling Price per Unit. Here, it is ($30 - $12) / $30 = $18 / $30 = 0.60.

Fixed Company Produces a Single Product Selling for $30 Per