A firm’s contribution margin ratio =40%, selling price=$100/unit

A firm’s contribution margin ratio =40%, selling price=$100/unit

A firm’s contribution margin ratio =40%, selling price=$100/unit. Variable cost per unit is:

A. $40

B. $60

C. $100

D. $0

Answer: B

Rationale: CM%=(SP-VC)/SP → VC=100×(1-40%)=$60.