# Contribution margin ratio

Devlin Company has two divisions, C and D. The overall company contribution margin ration is 30% with sales in the two divisions totaling $500,000. If variable expenses are $300,000 in Division C, and if Division C's contribution margin ratio is 25%, then sales in Division D must be?

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#### Solution Preview

Sales in Division D must be 35% to make overall contribution margin ratio of 30%

30%=(x+25%)/2

x=35%

Note:

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#### Solution Summary

This provides the steps to calculate the Contribution margin ratio

$2.19