The Halpert Group produces a single product selling for $ 80 per unit. Variable costs are $ 7 per unit and total fixed costs are $ 5 comma 000. What is the contribution margin ratio? A. 9 %

Contribution margin ratio = 0.125 = 12.5%

Explanation:

Giving the following information:

Selling price = $80

Unitary variable cost = $70

To calculate the contribution margin ratio, we need to use the following formula:

Contribution margin ratio = (selling price - unitary variable cost) / selling price

Contribution margin ratio = (80 - 70) / 80 = 0.125 = 12.5%