Sutton Company Produces Flash Drives for Computers, Which It Sells

question 92

Multiple Choice

Sutton Company produces flash drives for computers, which it sells for $20 each.Each flash drive costs $6 of variable costs to make.During April, 1,000 drives were sold.Fixed costs for April were $2 per unit for a total of $2,000 for the month.How much is the contribution margin ratio?

• A)30%
• B)40%
• C)60%
• D)70%

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Definitions:

Cultural Backgrounds

The various social, religious, ethnic, and cultural influences that contribute to an individual's unique worldview and approach to life.

Insourcing

Job creation through foreign direct investment.

Foreign Direct Investment

Investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets.

Market-Entry Strategies

Plans developed by businesses to enter new markets and establish a presence in them.