Use the Following Information to Determine the Contribution Margin Ratio

question 224

Multiple Choice

Use the following information to determine the contribution margin ratio: $\begin{array} { | l r | } \hline \text { Unit sales } & 50,000 \text { Units } \\\text { Unit selling price } & \$ 14.50 \\\text { Unit variable cost } & \$ 7.50 \\\text { Fixed costs } & \$ 204,000 \\\hline\end{array}$

• A) 24.5%.
• B) 48.3%.
• C) 34.1%.
• D) 6.9%.
• E) 51.7%.

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Definitions:

Bushels

A unit of volume that is used to measure agricultural commodities like grains and fruits.

Total Product Curve

A graphical representation of the production function, showing how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input.

Fixed Input

An input whose quantity is fixed for a period of time and cannot be varied (for example, land).

Capital

Resources, including finances and assets, used by businesses to fund their operations and investments.