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Bramble Corp. reported the following information for the current year: Sales (55000 units) $1100000, direct materials...

Bramble Corp. reported the following information for the current year: Sales (55000 units) $1100000, direct materials and direct labor $550000, other variable costs $55000, and fixed costs $360000. What is Bramble’s contribution margin ratio?

a. 45%.

b. 66%.

c. 34%.

d. 55%.

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Answer #1

OPTION A: 45%

EXPLANATION

contribution margin = sales - variable cost

= $1100000 - $550000 - $55000

= $495000

contribution margin ratio = contribution margin/Sales

= $495000/$1100000

= 45%

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