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Waterway Company has sales of $506000, variable costs of $442750, and fixed costs of $25000. Carla Vista Company has sales of $506000, variable costs of

Waterway Company has sales of $506000, variable costs of $442750, and fixed costs of $25000. Carla Vista Company has sales of $506000, variable costs of $210000, and fixed costs of $244000. Waterways contribution margin ratio is:

1. 12.50%.

2. 58.50%.

3. 87.50%.

4. 95.06%.

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