If sales are $525,000, variable costs are 53% of sales, and operating income is $50,000, what is the contribution margin ratio?
A) 47%
B) 26.5%
C) 9.5%
D) 53%

Name: If sales are $525,000, variable costs are 53% of sales, and operating income is $50,000, what is the contribution margin ratio? A) 47% B) 26.5% C) 9.5% D) 53%
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Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Sales - Variable Costs) / Sales. Variable costs are 53% of sales, so the contribution margin ratio is 47% (100% - 53%).

If Sales Are $525,000, Variable Costs Are 53% of Sales