Fulton Industries produces medical-grade computers for healthcare providers. Each computer sells for $2,850 each, and costs...
Fulton Industries produces medical-grade computers for healthcare providers. Each computer sells for $2,850 each, and costs $1,066 in variable costs to make. Last month, fixed costs of $944 per unit were incurred, and 395 computers were sold. What is the contribution margin ratio?
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11.44% |
||
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62.60% |
||
|
37.40% |
||
|
29.47% |
Homework Answers
Fulton Industries:
Contribution margin ratio : Contribution per unit / Selling price
Selling price is $ 2,850
Variable cost is $ 1,066
Contribution margin per unit is Selling price - Variable cost
= 2,850 - 1,066 = $ 1,784
Contribution margin ratio = $ 1,784 / $ 2,850
Contribution margin ratio = 62.60%
Hence Option 2 is correct.
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