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Should a contribution margin in dollars always equal contribution margin ratio? Why or why not.

Should a contribution margin in dollars always equal contribution margin ratio? Why or why not.

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Should a contribution margin in dollars always equal contribution margin ratio? Why or why not.
No its not true.
There is no direct relation ship between contribution margin in dollars and contribution margin ratio. Contribution margin is in monetary/absolute dollar term. It is sales less variable costs. But contribution margin ratio is the ratio between contribution margin dollars and sales dollars. It is in percentage form. So it mat happen that contribution margin in dollars of one product is the lowest, but is has the highest contribution margin ratio.
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