alleryStart learning →The contribution margin ratio is expressed as a percentage of a unit's:
ATotal revenue
BSelling price
CVariable cost
DFixed cost
Answer & Solution
Correct answer: B. Selling price
1. The ratio version of contribution margin needs a base.
2. Contribution margin is selling price minus total unit variable costs.
3. The contribution margin ratio is a percentage of a unit's selling price.
4. It is the percentage of selling price that exceeds total unit variable costs.
_Source: OpenStax Principles of Accounting, Volume 2: Managerial Accounting (CC BY-NC-SA 4.0), Ch 3 'Cost-Volume-Profit Analysis'_
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