[The Following Information Applies to the Questions Displayed Below

question 1

Multiple Choice

[The following information applies to the questions displayed below.]
Sultan Company produces a single product.The selling price is $50 per unit,and variable costs amount to $20 per unit.Sultan's fixed costs per month total $80,000.
-What is the contribution margin ratio of Sultan 's product?

• A)25%
• B)75%
• C)60%
• D)40%

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Definitions:

Economic Profit

The financial delta observed when a business's total outgoings, including every form of cost, are removed from its total intake.

MR = MC Rule

An economic principle stating that profit maximization occurs when a firm's marginal revenue equals its marginal cost.

Short Run

In economics, a timeframe during which the quantity of at least one production factor cannot be increased.

Long Run

A period in which all factors of production and costs are variable, allowing for full adjustment to changes in market conditions.