Question

Compute and interpret the contribution margin ratio using the following data:

Sales= $4,700
Total variable cost= $2,961

Answer 1

contribution margin ratio= 0.37

Step-by-step explanation:

Giving the following information:

Sales= $4,700

Total variable cost= $2,961

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

contribution margin ratio= (sales - total variable cost) / sales

contribution margin ratio= (4,700 - 2,961) / 4,700

contribution margin ratio= 0.37