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Mitchell Corporation manufactures a single product.The selling price is $85 per unit,and variable costs amount to $68 per unit.The fixed costs are $16,500 per month.
-What is the contribution margin ratio of Mitchell 's product?
A)65%
B)80%
C)72%
D)20%

Question

Quizplus · Accepted Answer

The contribution margin per unit is the selling price minus the variable cost, which is $85 - $68 = $17. The contribution margin ratio is the contribution margin per unit divided by the selling price, which is $17 / $85 = 0.20 or 20%.

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