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Coronado Industries produces flash drives for computers, which it sells for $15 each. Each flash drive...

Coronado Industries produces flash drives for computers, which it sells for $15 each. Each flash drive requires $9 of variable costs to make. During April, 1000 drives were sold. Fixed costs for April were $1000. How much is the contribution margin ratio?

  • A. 73%

  • B. 27%

  • C. 40%

  • D. 45%

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Answer #1
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Option C is the correct answer i.e. 40%
Computation of Contribution Margin ratio
Cell Reference Particulars Amount $
A Sales Price 15
B Variable cost per unit 9
C=A-B Contribution Margin per unit 6
D=C/A Contribution Margin ration 40%
OR
Contribution Margin ration = Contribution Margin per unit
Sales Price
Contribution Margin ration = 6
15
Contribution Margin ration = 40%
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