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    Noelle24's Avatar
    Noelle24 Posts: 1, Reputation: 1
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    #1

    Mar 19, 2008, 07:35 PM
    What is the company's contribution margin ratio?
    What is the company's contribution margin ratio?

    Sales $1,200,000
    Variable expenses 800,000
    Contribution margin 400,000
    Fixed expenses 300,000
    Net operating income $100,000



    sold 20000 units
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
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    #2

    Mar 20, 2008, 10:20 PM
    A contribution margin ratio is just the contribution margin as a percent of sales. And to find what percent one thing is of another, you always divide in that order.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #3

    Mar 22, 2008, 04:52 PM
    Contribution Margin Ratio = Contribution Margin / Total Sales

    Contribution Margin = Sales – Variable Cost

    CM Ratio = 400,000 / 1,200,000
    CM Ratio = 33.33%
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