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    tasmith2's Avatar
    tasmith2 Posts: 1, Reputation: 1
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    #1

    Mar 13, 2007, 08:50 AM
    Contribution margin ratio
    Im am trying to figure out how to compute contribution margin ratio. I found the sales mix percentage, but where do I go from there. You can use whatever numbers you want as long as you can give me a break down on how to compute the contribution margin ratio
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    Mar 13, 2007, 07:47 PM
    Sales 100
    Variable Costs (60)
    Contribution Margin 40
    Fixed Costs (10)
    Net Income 30

    Contribution Margin = Sales – Variable Costs = 100-60 = 40
    Contribution Margin Ratio = (Sales – Variable Costs) / Sales = (100-60) / 100 = 40%
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