Question

​Jack's Toys sells kites for $35 each. Variable costs are per kite. Fixed costs are per month. What is the contribution margin ratio for the​ kites?

Answer 1

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

Step-by-step explanation:

We weren't provided with enough information to calculate the contribution margin ratio, but, I will provide the formula and an example to guide an answer.

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

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

For example:

Selling price= $35

Unitary variable cost= 23

contribution margin ratio= (35 - 23)/35

contribution margin ratio= 0.34