Calculate contribution margin ratio for this product. selling price per unit 400 variable cost per unit 100 monthly sales volume 600 fixed expenses per month total 185820?

Answer

The first step is to calculate the Unit contribution margin UCM= USP -UVC,
That is, UCM = Unit selling price - Unit Variable price
Therefore here, UCM= 400-100=300

The next step is: Contribution Margin Ratio = UCM/USP
i.e, CMR= 300/400= 0.75 = 75%

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