Question

Jensen Company has a contribution margin ratio of 45%. This means that its variable costs are 55% of sales. True False

Answer 1

Jensen company has a contribution margin ratio of 45%. This means that its variable costs are 55% of sales.

This statement is true

Step-by-step explanation:

Contribution margin ratio is the ratio of contribution to sales. Since the contribution margin ratio is 45%, it implies that variable costs are 55% of sales.