If the contribution margin per unit is $15 and selling price per unit is $20, the contribution margin ratio is:
Question
If the contribution margin per unit is 20, the contribution margin ratio is:
Solution
The contribution margin ratio is calculated by dividing the contribution margin per unit by the selling price per unit.
Here's the step-by-step calculation:
- Contribution Margin per unit = $15
- Selling Price per unit = $20
So, Contribution Margin Ratio = Contribution Margin per unit / Selling Price per unit
= 20
= 0.75 or 75%
So, the contribution margin ratio is 75%.
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