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Homework answers / question archive / Mom and Pop's Ice Cream Shoppe sells ice cream cones for $5
Mom and Pop's Ice Cream Shoppe sells ice cream cones for $5.00 per customer. Variable costs are $2.25 per cone. Fixed costs are $3,000 per month. What is the company's contribution margin ratio?
A) 182%
B) 45%
C) 3%
D) 55%
Answer: D
Explanation: D)
Sales $5.00
Less Variable costs 2.25
= Contribution Margin 2.75 divided by $5.00 sales = 55%
