Given that the contribution margin per unit is $800 and the selling price per unit is $20,000, what is the contribution margin ratio expressed as a percentage?

Multiple choice question for Cost Volume Profit Analysis. Select an option, then review the explanation below.

Explanation

The contribution margin percentage is calculated by dividing the contribution margin per unit by the selling price per unit and then multiplying by 100. Here, (800 / 20,000) × 100 = 4%, which corresponds to option C.

Practice related questions from the same subject.

1.What is obtained when the fixed costs are divided by the contribution margin per unit?
2.Given a contribution margin ratio of 30% and a selling price of $5,000, what is the contribution margin amount for each unit?
3.Given a contribution margin of $13,000 and total variable costs amounting to $7,000, what is the total revenue?
4.Given a selling price of $5000 and a contribution margin per unit of $1000, what is the contribution margin percentage?
5.Given a revenue of $15,000, variable costs totaling $5,000, and fixed costs amounting to $2,000, what is the operating income?

Given that the contribution margin per unit is $800 and the selling price per unit is $20,000, what is the contribution margin ratio expressed as a percentage?

Explanation

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