Calculation Of Contribution Margin Ratio
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Question
Mark Corporation produces two models of calculators. The Business model sells for $60, and the Math model sells for $40. The variable expenses are given below:
|
Business Model |
Math Model |
|
|
Variable production costs per unit |
$14 |
$15 |
|
Variable selling and administrative expenses per unit |
$4 |
$1 |
The fixed expenses are $66,000 per month. The expected monthly sales of each model are: Business, 1,300 units; Math, 800 units. The contribution margin ratio for the Business model is: (Do not round intermediate calculations.)
a. 40%
b. 70%
c. 86%
d. 74%
Summary
The question belongs to Accounting and it discusses about calculation of contribution margin ratio.
Total Word Count 45
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