Anthony Office Supplies sells refills on printer ink cartridges for $16 per refill.Variable costs are $4 per refill.Fixed costs are $2,000 per month.What is the contribution margin ratio for the printer ink cartridge refills?

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Selling Price - Variable Costs) / Selling Price. Here, it is ($16 - $4) / $16 = $12 / $16 = 0.75 or 75%.

Anthony Office Supplies Sells Refills on Printer Ink Cartridges for $16