Use the information below to answer the following question(s).

During the year, Cornell produced and sold 60,000 units of product at a sale price of $8.00 per unit. There was no beginning inventory of product at the start of the year.
-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

Use the information below to answer the following question(s).
  
During the year, Cornell produced and sold 60,000 units of product at a sale price of $8.00 per unit. There was no beginning inventory of product at the start of the year.
-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?

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Selling Price per Unit - Variable Cost per Unit) / Selling Price per Unit. Here, it is ($60 - $12) / $60 = $48 / $60 = 0.80 or 80%.

Use the Information Below to Answer the Following Question(s)