If the contribution margin per unit is $15 and selling price per unit is $20, the contribution margin ratio is:

1. Break Down the Problem

To find the contribution margin ratio, we need to understand the relationship between the contribution margin per unit and the selling price per unit.

2. Relevant Concepts

The contribution margin ratio can be calculated using the following formula:

$\text{Contribution Margin Ratio} = \frac{\text{Contribution Margin per Unit}}{\text{Selling Price per Unit}}$

3. Analysis and Detail

Given:

• Contribution Margin per Unit = $15
• Selling Price per Unit = $20

Substituting these values into the formula:

$\text{Contribution Margin Ratio} = \frac{15}{20}$

4. Verify and Summarize

Now, we can simplify the ratio:

$\text{Contribution Margin Ratio} = 0.75$

This means that the contribution margin ratio is 75%.

Final Answer

The contribution margin ratio is 0.75, or 75%.