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7 May, 15:22

Bramble Corp. produces flash drives for computers, which it sells for $10 each. Each flash drive costs $7 of variable costs to make. During April, 1000 drives were sold. Fixed costs for April were $1000. How much is the contribution margin ratio?

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  1. 7 May, 18:14
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    30%

    Explanation:

    Data provided

    Sales = $10

    Drive cost = $7

    The computation of contribution margin ratio is shown below:-

    Contribution margin ratio = Contribution : Sales * 100

    = ($10 - $7) : $10 * 100

    = $3 : $10 * 100

    = 0.3 * 100

    = 30%

    Therefore for computing the contribution margin ratio we simply applied the above formula.
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