Jensen Company has a contribution margin ratio of 45%.This means that its variable costs are 55% of sales.

Name: Jensen Company has a contribution margin ratio of 45%.This means that its variable costs are 55% of sales.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Sales - Variable Costs) / Sales. If the contribution margin ratio is 45%, it means that 45% of sales revenue is left after covering variable costs, implying that variable costs are indeed 55% of sales.

Jensen Company Has a Contribution Margin Ratio of 45