the contribution margin ratio can be calculated in all of the following ways except: a contribution margin…

the contribution margin ratio can be calculated in all of the following ways except: a contribution margin per unit + price. b total contribution margin + total sales. c 1 - variable cost ratio. d fixed costs + contribution margin ratio. question 18 learner company sells its product for $100. it has a variable cost ratio of 70% and total fixed cost of $9,000. what is

the contribution margin ratio can be calculated in all of the following ways except: a contribution margin per unit + price. b total contribution margin + total sales. c 1 - variable cost ratio. d fixed costs + contribution margin ratio. question 18 learner company sells its product for $100. it has a variable cost ratio of 70% and total fixed cost of $9,000. what is

Answer

Explanation:

Step1: Recall contribution - margin - ratio formulas

The contribution - margin ratio ($CMR$) has several correct calculation methods. The contribution - margin ratio can be calculated as $\text{CMR}=\frac{\text{Contribution Margin per Unit}}{\text{Price}}$ (equivalent to $\frac{\text{Total Contribution Margin}}{\text{Total Sales}}$), and also $\text{CMR} = 1-\text{Variable Cost Ratio}$.

Step2: Analyze each option

  • Option A: $\text{Contribution Margin per Unit}\div\text{Price}$ is a correct way to calculate the contribution - margin ratio, not $\text{Contribution Margin per Unit}+\text{Price}$.
  • Option B: $\text{Total Contribution Margin}\div\text{Total Sales}$ is a correct formula for the contribution - margin ratio.
  • Option C: $1 - \text{Variable Cost Ratio}$ is a correct formula for the contribution - margin ratio since $\text{Contribution Margin}=\text{Sales}-\text{Variable Costs}$, so $\frac{\text{Contribution Margin}}{\text{Sales}}=1-\frac{\text{Variable Costs}}{\text{Sales}}$.
  • Option D: Fixed costs are related to break - even analysis ($\text{Break - even Sales}=\frac{\text{Fixed Costs}}{\text{Contribution Margin Ratio}}$), but fixed costs $\div$ contribution - margin ratio is not a way to calculate the contribution - margin ratio.

Answer:

D. Fixed costs $\div$ Contribution Margin Ratio