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Homework answers / question archive / LaComedia Dinner Theater sells tickets for dinner and a show for $40 each
LaComedia Dinner Theater sells tickets for dinner and a show for $40 each. The cost of providing dinner is $26 per ticket and the fixed cost of operating the theater is $100,000 per month. The company can accommodate 12,000 patrons each month. What is the contribution margin ratio?
A) 65%
B) 35%
C) 14%
D) 286%
Answer: B
Explanation: B)
Sales $40
Less Variable costs 26
= Contribution Margin 14 Divided by $40 = 35%