The contribution margin ratio is calculated by subtracting the variable cost per unit from the sales price per unit, then dividing that result by the sales price per unit. This ratio tells you what percentage of each sales dollar is left over to cover fixed costs and profit after the variable costs have been paid.

Here's how you can calculate it:

1. Subtract the variable cost per unit from the sales price per unit. In this case, that's $234 (sales price) - $64 (variable cost) = $170. This is the contribution margin per unit.

2. Divide the contribution margin per unit by the sales price per unit. So, $170 (contribution margin) ÷ $234 (sales price) = 0.7264957264957265.

3. To convert this to a percentage, multiply by 100. So, 0.7264957264957265 x 100 = 72.65%.

4. Since you want the answer to 2 decimal places, you would round 72.65% to 72.65%.

So, the contribution margin ratio is 72.65%.

Question

The contribution margin ratio is calculated by subtracting the variable cost per unit from the sales price per unit, then dividing that result by the sales price per unit. This ratio tells you what percentage of each sales dollar is left over to cover fixed costs and profit after the variable costs have been paid.

Here's how you can calculate it:

1. Subtract the variable cost per unit from the sales price per unit. In this case, that's $234 (sales price) - $64 (variable cost) = $170. This is the contribution margin per unit.

2. Divide the contribution margin per unit by the sales price per unit. So, $170 (contribution margin) ÷ $234 (sales price) = 0.7264957264957265.

3. To convert this to a percentage, multiply by 100. So, 0.7264957264957265 x 100 = 72.65%.

4. Since you want the answer to 2 decimal places, you would round 72.65% to 72.65%.

So, the contribution margin ratio is 72.65%.

Knowee AI · Accepted Answer

The contribution margin ratio is calculated by subtracting the variable cost per unit from the sales price per unit, then dividing that result by the sales price per unit. This ratio tells you what percentage of each sales dollar is left over to cover fixed costs and profit after the variable costs have been paid.

Here's how you can calculate it:

1. Subtract the variable cost per unit from the sales price per unit. In this case, that's $234 (sales price) - $64 (variable cost) = $170. This is the contribution margin per unit.

2. Divide the contribution margin per unit by the sales price per unit. So, $170 (contribution margin) ÷ $234 (sales price) = 0.7264957264957265.

3. To convert this to a percentage, multiply by 100. So, 0.7264957264957265 x 100 = 72.65%.

4. Since you want the answer to 2 decimal places, you would round 72.65% to 72.65%.

So, the contribution margin ratio is 72.65%.

A product has a sales price of $234 and a per-unit variable cost of $64.What is the contribution margin ratio? Please answer to 2 decimal places

Question

A product has a sales price of $234 and a per-unit variable cost of$ 64. What is the contribution margin ratio?

Solution

Similar Questions

Upgrade your grade with Knowee