Express Bus Company operates a bus route that takes passengers from Cleveland to Chicago every day.Assume the bus tickets sell for $50 per rider; the bus line's variable costs are $35 per rider; and its fixed costs are $75,000 each month.What is the contribution margin ratio?

Question

Quizplus · Accepted Answer

The contribution margin per rider is $50 (selling price) - $35 (variable cost) = $15. The contribution margin ratio is $15 / $50 = 0.30 or 30%.

Express Bus Company Operates a Bus Route That Takes Passengers