A manufacturer of tiling grout has supplied the following data:

-The company's contribution margin ratio is closest to:
A) 28.9%
B) 63.9%
C) 71.1%
D) 36.1%

Question

A manufacturer of tiling grout has supplied the following data:
 
-The company's contribution margin ratio is closest to:
A) 28.9% 
B) 63.9% 
C) 71.1% 
D) 36.1%

Quizplus · Accepted Answer

Contribution margin = Sales - Variable expenses
= $2,736,000 - ($1,349,000 + $399,000)
= $2,736,000 - $1,748,000 = $988,000
CM ratio = Contribution margin ÷ Sales = $988,000 ÷ $2,736,000 = 0.361

A Manufacturer of Tiling Grout Has Supplied the Following Data