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30 August, 14:53

If blue ridge railway's fixed costs total $50,000 per month, the variable cost per passenger is $ $10 , and tickets sell for $50 , what is the contribution margin per unit and contribution margin ratio?

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  1. 30 August, 15:48
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    Contribution margin per unit = sales - variable cost

    sales are the tickets sold = 50$

    variable cost per passenger = 10$

    50-10 = 40$ of Contribution margin per unit

    Contribution margin ratio (of total sales) =

    (Contribution margin: sales) x 100=

    (40/50) x 100

    =80%
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