Carolina Products
Carolina Products sells a unique item with the following information available:
$\begin{array}{ll}
\text { Sales price } & \$ 40 \text { per unit } \
\text { Variable costs } & \$ 12 \text { per unit } \
\text { Fixed Costs } & \$ 2 \text { per unit } \
\text { Units produced and sold } & 2000
\end{array}$
-What is the contribution margin ratio?

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Sales price per unit - Variable costs per unit) / Sales price per unit. Here, it is ($40 - $12) / $40 = $28 / $40 = 0.7 or 70%.

Carolina Products Carolina Products Sells a Unique Item with the Following

Carolina Products
Carolina Products Sells a Unique Item with the Following