The Settler's Chuck Wagon sells tickets for dinner and a show for $50 each

Accounting Feb 26, 2021

The Settler's Chuck Wagon sells tickets for dinner and a show for $50 each. The cost of providing dinner is $23 per ticket and the fixed cost of operating the theater is $115,000 per month. The company can accommodate 13,500 patrons each month. What is the contribution margin ratio?

A) 46%

B) 185%

C) 27%

D) 54%

Expert Solution

Answer: D

Explanation: D)

Sales $50

Less Variable costs 23

= Contribution Margin 27 Divided by $50 = 54%

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