Gnat Company,a Producer of Electronic Devices,has the Following Information The Contribution-Margin Ratio Is ________

question 138

Multiple Choice

Gnat Company,a producer of electronic devices,has the following information:
$\begin{array} { l } \text {Selling price per unit }& \$5.00\\ \text { Variable cost per unit}&\$3.00 \\ \text { Total fixed costs}&\$900,000.00 \\\end{array}$

The contribution-margin ratio is ________.

• A) 30%
• B) 40%
• C) 60%
• D) 100%

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Definitions:

Fixed Assets

Long-term tangible assets used in the operation of a business and not expected to be converted into cash within a year.

Return on Investment

measures the gain or loss generated from an investment relative to its cost, providing insight into the efficiency of the investment.

Profit Centre Managers

Individuals responsible for overseeing profit centres, areas within a business that are directly responsible for generating revenue exceeding their operating costs.

Pricing

The process of determining what a company will receive in exchange for its products or services.