If the fixed cost is $15000 and the breakeven revenue is $45000 then the contribution margin will be ___________?
Correct answer: A. 33.34%
- A. 33.34%
- B. 43.34%
- C. 23%
- D. 25%
Explanation
The contribution margin ratio is fixed costs divided by break-even revenue: $15,000 ÷ $45,000 = 33.33%, which rounds to 33.34%.
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About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
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