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18 January, 08:29

Compute and interpret the contribution margin ratio using the following dа ta: sales, $6,000; total variable cost, $3,000.

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  1. 18 January, 08:48
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    The contribution margin ratio is 0.5

    Explanation:

    In order to calculate the contribution margin ratio we will use the formula

    (Sales - Variable cost) / Sales=Contribution margin ratio

    Sales = 6,000

    Variable cost = 3,000

    We will input these values in the formula.

    (6,000-3,000) / 6,000=3,000/6,000=0.5
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