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Question 8 (1 point)
The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the
contribution margin rate.
0000
b
C
d
Question 8 of 20 | Page 8 of 20
40%
60%
30%
50%

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Suggested Answer

The contribution margin rate is 40%.What is contribution margin rate?A company's contribution margin rate is the total revenue minus variable costs divided by the revenue.First we need to determine the contribution margin in order to calculate the contribution margin rate. There are two approaches to determine the contribution margin.Contribution Margin = Net Sales Revenue – Variable CostContribution Margin = Fixed Costs + Net IncomeContribution Margin = $15 - $9 = $6The contribution margin is $6.Now we will calculate the contribution margin rate using this formula,Contribution Margin Rate = Contribution Margin [tex]/[/tex] Sales RevenueContribution Margin Rate = $6 / $15                                              = 0.4 * 100                                              = 40%.Hence the contribution margin rate is 40%.To learn more about contribution margin rate from the given linkhttps://brainly.com/question/24039258#SPJ1