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2 September, 07:11

Steffen Corporation has three products ... Steffen Corporation has three products with the following characteristics: Product A Product BProduct C Monthly sales in dollars $120,000 $160,000 $200,000 Contribution margin ratio 20% 40% 16% The overall contribution margin ratio for the company as a whole is closest to:

A. 35.3%

B. 25.0%

C. 75.0%

D. 28.5%

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  1. 2 September, 09:17
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    B. 25.0%

    Explanation:

    For computing the overall contribution margin ratio, we have to first compute the weightage

    (A) (B) (A * B)

    Product Monthly sales in dollars Weightage CM ratio Overall CM ratio

    Product A $120,000 25% 20% 5%

    Product B $160,000 33.33% 40% 13.33%

    Product C $200,000 41.67% 16% 6.67%

    Total $480,000 100% 25%
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