Jack's Toys sells kites for $20 each

Accounting Mar 01, 2021

Jack's Toys sells kites for $20 each. Variable costs are $8 per kite. Fixed costs are $2,400 per month. What is the contribution margin ratio for the kites?

A) 167%

B) 60%

C) 12%

D) 40%

Expert Solution

Answer: B

Explanation: B)

Sales $20

Less Variable costs 8

= Contribution Margin 12 divided by $20 = 60%

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