Question

Computer Corp sells 2000 flash drives at a price of $20 each with variable expenses of $5 per drive. What is the contribution margin percentage for each flash drive they sell?

a) 75%
b) 65%
c) 25%
d) None of the above

Answer 1

The contribution margin percentage for each flash drive sold by Computer Corp is a) 75%, which is calculated by subtracting the variable cost from the selling price and then dividing by the selling price.

Step-by-step explanation:

The question asks about the contribution margin percentage for each flash drive sold by Computer Corp. To find this, we calculate the contribution margin per unit by subtracting the variable cost per unit from the selling price, and then we divide this number by the selling price to get the percentage.

Selling price per flash drive: $20
Variable expenses per flash drive: $5
Contribution margin per unit: $20 - $5 = $15
Contribution margin percentage: ($15 / $20) x 100 = 75%

Therefore, the correct answer is a) 75%.