The Halpert Group produces a single product selling for $40 per unit. Variable costs are $7 per unit and total fixed costs are $7000. What is the contribution margin ratio?

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Selling Price per Unit - Variable Cost per Unit) / Selling Price per Unit. Here, it is ($40 - $7) / $40 = $33 / $40 = 0.825 or 82.5%, which rounds to 83%.

The Halpert Group Produces a Single Product Selling for $40