Contribution margin ratio is equal to ________.
A) fixed costs divided by contribution margin per unit
B) net sales revenue per unit minus variable costs per unit
C) net sales revenue minus variable costs
D) contribution margin divided by net sales revenue

Question

Quizplus · Accepted Answer

Contribution margin ratio is the ratio of the contribution margin to net sales revenue. Hence, the formula for contribution margin ratio is:

Contribution margin ratio = Contribution margin / Net sales revenue

Therefore, the best choice is D, which is the option that represents the correct formula. Option A is the formula for the breakeven point. Option B is the formula for the contribution margin per unit. Option C is the formula for the gross margin.

Contribution Margin Ratio Is Equal to ________