Question

During the year, the company produced and sold 30,000 units of product at a selling price of $18.50 per unit. There was no beginning inventory of product at the beginning of the year. What is the contribution margin ratio for Blaine Corporation (round to 1 decimal)

Answer 1

Answer: 67.7%

Step-by-step explanation:

Contribution Margin ratio = (Sales per units - Variable cost per unit) / Sales per unit

Variable cost per unit = (Manufacturing + Marketing + Administrative)/ Units sold

= (115,000 + 22,000 + 42,000) / 30,000

= $5.97

Contribution Margin ratio = ( 18.50 - 5.97)/ 18.50

= 67.7%