Question

The Halpert Group produces a single product selling for $ 80 per unit. Variable costs are $ 7 per unit and total fixed costs are $ 5 comma 000. What is the contribution margin​ ratio? A. 9​%

Answer 1

Contribution margin ratio= 0.125= 12.5%

Step-by-step explanation:

Giving the following information:

Selling price= $80

Unitary variable cost= $70

To calculate the contribution margin ratio, we need to use the following formula:

Contribution margin ratio= (selling price - unitary variable cost) / selling price

Contribution margin ratio= (80 - 70) / 80= 0.125= 12.5%