Calculation Of Contribution Margin Ratio

Question

Mark Corporation produces two models of calculators. The Business model sells for $60, and the Math model sells for $40. The variable expenses are given below:

 

Business Model

Math Model

Variable production costs per unit

$14

$15

Variable selling and administrative expenses per unit

$4

$1

The fixed expenses are $66,000 per month. The expected monthly sales of each model are: Business, 1,300 units; Math, 800 units. The contribution margin ratio for the Business model is: (Do not round intermediate calculations.)

a. 40%

b. 70%

c. 86%

d. 74%

 

Summary

The question belongs to Accounting and it discusses about calculation of contribution margin ratio.

Total Word Count 45

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