Engineering Board Exam Reviewer · Engineering Management · medium

A product sells for ₱250 and has a variable cost of ₱150 per unit. What is its contribution margin ratio?

  1. 60%
  2. 40%
  3. 100%
  4. 166.7%

Answer

B. 40%

Solution

CM ratio = (P - VC)/P = 100/250 = 40%.

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