Mom and Pop's Ice Cream Shoppe sells ice cream cones for $5.00 per customer.Variable costs are $2.25 per cone.Fixed costs are $3,000 per month.What is the company's contribution margin ratio?

Name: Mom and Pop's Ice Cream Shoppe sells ice cream cones for $5.00 per customer.Variable costs are $2.25 per cone.Fixed costs are $3,000 per month.What is the company's contribution margin ratio?
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Question

Quizplus · Accepted Answer

D)
Sales $5.00
Less Variable costs 2.25
= Contribution Margin 2.75 divided by $5.00 sales = 55%

Mom and Pop's Ice Cream Shoppe Sells Ice Cream Cones