The Sage Group produces a single product selling for $60 per unit.Variable costs are $12 per unit and total fixed costs are $6,000.What is the contribution margin ratio?

Question

Quizplus · Accepted Answer

Contribution margin ratio = (selling price - variable costs) / selling price

= ($60 - $12) / $60

= $48 / $60

= 0.8 or 80%

Therefore, the contribution margin ratio is 0.80, which is option C.

The Sage Group Produces a Single Product Selling for $60