Paco's Bikes Sells 120 Bicycles Each Month for $400 Per

question 24

Multiple Choice

Paco's Bikes sells 120 bicycles each month for $400 per unit.Variable cost per unit is $160 and fixed costs total $4,800 per month.What is the contribution margin ratio?

• A)0.40
• B)0.60
• C)2.50
• D)0.70
• E)None of the answer choices is correct.

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Definitions:

Incentive Payment

A financial reward offered to encourage or motivate specific actions or behaviors in individuals or groups.

Target Amount

The specific financial goal or budget set for a project, initiative, or investment.

Cost Reimbursable Contract

A type of contract where a contractor is paid for all of its allowed expenses to a set limit plus additional payment to allow for a profit.

Time And Material Contracts

A contractual arrangement that pays for labor at a fixed hourly rate and materials at cost.