The Gasson Company Sells Three Products, Product A, Product B

question 166

Multiple Choice

The Gasson Company sells three products, Product A, Product B and Product C, and had sales of $1,000,000 during the month of June. The company's overall contribution margin ratio was 37% and fixed expenses totaled $350,000. Sales were: Product A, $500,000; Product B, $300,000; and Product C, $200,000. Traceable fixed costs were: Product A, $120,000; Product B, $100,000; and Product C, $60,000. The variable expenses of Product A were $300,000 and the variable expenses of Product B were $180,000.
-The contribution margin ratio for Product C is:

• A)75%
• B)69%
• C)31%
• D)25%

---

Definitions:

Cost Of Merchandise Sold

The total cost incurred to purchase or produce the goods that have been sold to customers during a specific period.

Gross Profit

The difference between revenue and the cost of goods sold, indicating the amount before deducting operating expenses.

Cost Of Merchandise Sold

The total expense incurred by a business to purchase or manufacture the goods sold during a period.

Merchandise Inventory

The total cost of all goods held by a company that are available for sale to customers, part of current assets on the balance sheet.