Mark Corporation produces two models of calculators. The Business model sells for $60, and
the Math model sells for $40. The variable expenses are given below:
|
|
Business |
Math |
|
|
Model |
Model |
|
Variable production costs per unit |
$15 |
$16 |
|
Variable selling and administrative expenses per unit |
$9 |
$6 |
The fixed expenses are $75,000 per month. The expected monthly sales of each model are:
Business, 1,000 units; Math, 500 units.
The contribution margin ratio for the Business model is:
A) 40 percent
B) 75 percent
C) 85 percent
D) 60 percent