If the variable cost of an item is $4.00, and the sales price is $6.00, the contribution rate for the item is $2.00.

Name: If the variable cost of an item is $4.00, and the sales price is $6.00, the contribution rate for the item is $2.00.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The contribution rate is calculated as (Sales Price - Variable Cost) / Sales Price, which is ($6.00 - $4.00) / $6.00 = $2.00 / $6.00 = 0.3333 or 33.33%, not $2.00.

If the Variable Cost of an Item Is $4