Ingredients consumed in the manufacture of packaged food products are considered:

a. Fixed Costs

b. Liabilities

c. Variable Cost

d. Assets

The Sabian company manufactures cymbals and sells them to colleges for marching bands. This last quarter, Sabian sold $500,000 with variable costs of $200,000 and fixed costs of $150,000. What was Sabians contribution margin?

a. $150,000

b. $200,000

c. $350,000

d. $300,000

You have a small business selling hand-knit scarves through the internet. You sell each of your scarves for $35. Your variable expenses are as follows for one scarf:

Item Amount

Yarn/Materials $15

Packaging $3

Shipping $5

What is your contribution margin for selling one scarf?

a. $12

b. $17

c. $20

d. $15

The No Doze Cafe coffee shop sells 50 different types of coffee to its patrons. It costs $4 for a cup of coffee. Each day it sells on average 500 cups of coffee. On the weekends it sells closer to 1000 cups of coffee. Here is a breakdown of the shops expenses per cup of coffee:

Variable Costs Item Amount

Coffee/Water $1.50

Paper Cup $0.30

Sweetener $0.20

Fixed Costs Item Amount

Labor $100/day per employee

Store Space Rent $800/month

What is the contribution margin for the shop selling one cup of coffee on an average day?

a. $2.00

b. $1.75

c. $1.92

d. $2.50

The formula for contribution margin ratio is:

a. fixed costs minus variable costs.

b. contribution margin per unit divided by sales price per unit.

c. fixed costs plus variable costs.

d. fixed costs divided by number of units.

Given sales revenue of $80,000 and contribution margin of $60,000 what are the variable costs?

a. $140,000

b. $50,000

c. $60,000

d. $20,000

When 10,000 units are produced and the sales price is $60 per unit, what are the variable costs if the contribution margin is $20?

a. $200,000

b. $400,000

c. $250,000

d. $40,000