Psari's,a company that sells fishing nets,provides the following information about its product: $$\begin{array} { | l | r | }
\hline \text { Targeted operating income } & \$ 54,000 \
\hline \text { Sales price per unit } & 10.00 \
\hline \text { Variable cost per unit } & 1.50 \
\hline \text { Total fixed costs } & 120,000 \
\hline
\end{array}$$ What is the contribution margin ratio? (Round any intermediate calculations and your final answer to two decimal places.)

Question

Psari's,a company that sells fishing nets,provides the following information about its product: $$\begin{array} { | l | r | } 
\hline \text { Targeted operating income } & \$ 54,000 \
\hline \text { Sales price per unit } & 10.00 \
\hline \text { Variable cost per unit } & 1.50 \
\hline \text { Total fixed costs } & 120,000 \
\hline
\end{array}$$ What is the contribution margin ratio? (Round any intermediate calculations and your final answer to two decimal places.)

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Sales price per unit - Variable cost per unit) / Sales price per unit. So, it is (10.00 - 1.50) / 10.00 = 8.50 / 10.00 = 0.85 or 85.00%.

Psari's,a Company That Sells Fishing Nets,provides the Following Information About