# Computing the Contribution Margin Ratio

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I have a multiple choice problem I need help with:

Sutton Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $6 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for April were $2 per unit for a total of $2,000 for the month. How much is the contribution margin ratio?

A) 30%

B) 40%

C) 60%

D) 70%

https://brainmass.com/business/financial-ratios/computing-the-contribution-margin-ratio-299031

#### Solution Preview

The contribution margin is equal to sales revenues less variable costs. The contribution margin ratio equals the contribution margin ...

#### Solution Summary

This solution helps with problems about financial ratios.

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