Question

If blue ridge ​railway's fixed costs total $50,000 per​ month, the variable cost per passenger is $ $10​, and tickets sell for $50​, what is the contribution margin per unit and contribution margin​ ratio?

Answer 1

Contribution margin per unit = sales- variable cost
sales are the tickets sold= 50$
variable cost per passenger = 10$
50-10= 40$ of Contribution margin per unit

Contribution margin ratio( of total sales) =
(Contribution margin÷ sales) x 100=
(40/50) x 100
=80%