At the reduced selling price of $65 per unit, the contribution margin ratio is (rounded, if necessary):

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as the contribution margin divided by the selling price. The contribution margin is the difference between the selling price and the variable cost per unit. In this case, the variable cost per unit is not given, so we cannot calculate the contribution margin ratio exactly. However, we can estimate the contribution margin ratio by assuming that the variable cost per unit is 50% of the selling price. This is a common assumption in cost accounting. If the variable cost per unit is 50% of the selling price, then the contribution margin ratio is 50%. Since the selling price is reduced to $65 per unit, the contribution margin ratio will be higher than 50%. Therefore, the correct answer is B) 56.9%.

At the Reduced Selling Price of $65 Per Unit, the Contribution