The company's contribution margin ratio is closest to:

Question

Quizplus · Accepted Answer

To calculate the contribution margin ratio, we need to divide the contribution margin by the total revenue. 
Contribution Margin = Total Revenue - Total Variable Costs. 
From the information given in the question, we can calculate the contribution margin as follows: 
Contribution Margin = $1,200,000 - ($500,000 + $200,000 + $100,000 + $100,000)
= $300,000 
Total Revenue = $1,200,000 
Contribution Margin Ratio = (Contribution Margin / Total Revenue) * 100 
= ($300,000 / $1,200,000) * 100 
= 25% 
Therefore, the closest option is 33.8% (Option D).

The Company's Contribution Margin Ratio Is Closest To