Steffen Corporation has three products with the following characteristics: The overall contribution margin ratio for the company as a whole is closest to:

Question

Steffen Corporation has three products with the following characteristics:  The overall contribution margin ratio for the company as a whole is closest to:

Quizplus · Accepted Answer

The overall contribution margin ratio can be calculated as the total contribution margin divided by the total sales revenue. Without knowing the specific sales and contribution margin figures for each product, it is impossible to calculate the exact overall contribution margin ratio. However, we can make some assumptions based on the options given. The highest option is 75%, which seems unlikely if one of the products has a negative contribution margin (meaning it actually costs the company money to produce and sell). Option A is just slightly higher than option D, and option D is just slightly higher than option C. Based on this reasoning, it is safest to choose option C as the closest overall contribution margin ratio for the company. 11ea7998_5e0e_0b4e_911b_7f3dab71ea52_TB2627_00_TB2627_00 Overall CM ratio = Contribution margin ÷ Sales = $120,000 ÷ $480,000 = 0.25

Steffen Corporation Has Three Products with the Following Characteristics