Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the contribution margin ratio.

Question

Quizplus · Accepted Answer

Contribution margin ratio = (Selling price per unit - Variable cost per unit) / Selling price per unit= ($450 - $270) / $450= $180 / $450= 0.40 or 40.0%

Flannigan Company Manufactures and Sells a Single Product That Sells