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Sultan Company produces a single product.The selling price is $50 per unit,and variable costs amount to $20 per unit.Sultan's fixed costs per month total $80,000.
-What is the contribution margin ratio of Sultan 's product?

Question

Quizplus · Accepted Answer

The contribution margin ratio is calculated as (Selling Price per Unit - Variable Cost per Unit) / Selling Price per Unit. Here, it is ($50 - $20) / $50 = $30 / $50 = 0.6 or 60%.

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