Electric Jet Skis operates a jet ski rental business

Accounting Feb 26, 2021

Electric Jet Skis operates a jet ski rental business. Assume the jet skis rent for $55 per 6 hours. The variable costs are $33 per 6 hours rental, and its fixed costs are $80,000 each month. What is the contribution margin ratio?

A) 40%

B) 60%

C) 250%

D) 22%

Expert Solution

Answer: A

Explanation: A)

Sales $55

Less Variable costs 33

= Contribution Margin 22 divided by $55 sales = 40%

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote