Figure 16 - 1 The Cumberland Company provides the following information:
Refer to Figure 16-1. What is the contribution margin ratio for Cumberland?

Question

Figure 16 - 1 The Cumberland Company provides the following information:
 Refer to Figure 16-1. What is the contribution margin ratio for Cumberland?

Quizplus · Accepted Answer

The formula for contribution margin ratio is (contribution margin / sales). From the chart, we can see that the contribution margin for Cumberland is $500,000 and the sales are $1,000,000. Therefore, the contribution margin ratio is 0.50 (or 50%).

Figure 16 - 1 the Cumberland Company Provides the Following