Kingston Company sells its product for $200 per unit.The company's accountant provided the following cost information: $\begin{array}{|l|l|}
\hline \text { Manufacturing costs } & \$ 25,000+40 \% \text { of sales } \
\hline \text { Selling costs } & \$ 10,000+20 \% \text { of sales } \
\hline \text { Administrative costs } & \$ 15,000+10 \% \text { of sales } \
\hline
\end{array}$ What is Kingston Company's contribution margin ratio?
A) 30%
B) 15%
C) 35%
D) 20%

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Sales - Variable Costs) / Sales. The variable costs are 70% of sales (40% manufacturing + 20% selling + 10% administrative). Therefore, the contribution margin ratio is 30% (100% - 70%).

Kingston Company Sells Its Product for $200 Per Unit What Is Kingston Company's Contribution Margin Ratio? A) 30% B)

Kingston Company Sells Its Product for $200 Per Unit What Is Kingston Company's Contribution Margin Ratio?
A) 30%
B)