Contribution margin can be utilized for forecasting profit and as a tactic for boosting sales by motivating employees to sell the most profitable products, particularly if sales commission is paid. As you ponder expanding your small business and consider adding additional products, you want to further understand your current profit situation by finding out how much contribution margin is earned for every $$1$ of sales on your tumblers.

Armed with the knowledge you gained in your managerial accounting class, you create a Contribution Margin Income Statement for a typical month:

Tailored Tumblers

Contribution Margin Income Statement

$75$ Tumblers Sold per Month

Total

Per Unit

Sales Revenue

$$2,250$

$$30$

Less: Variable Expenses

$1,350$

$18$

Contribution Margin

$$900$

$$12$

Less: Fixed Expenses

$250$

Operating Income

$$650$

In order to determine how much contribution margin is earned for each $$1$ of sales, what is the contribution margin ratio on your tumbler sales? Round to the nearest whole number.

Select an option from the choices below and click Submit.

Thursday; Marcl

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$\backslash$table$[[,$Total,Per Unit$],[$Sales Revenue,$$2,250,$$$30$