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Happy Brews Coffee Shop sells coffee for $4 per cup. Variable cost | $1.50 per cup Fixed cost | $3,200 per month What is Happy Brews' contribution margin ratio? A. 62.5% B. 37.5% C. 42.5% D. 75%

Happy Brews Coffee Shop sells coffee for $4 per cup. Variable cost | $1.50 per cup Fixed cost | $3,200 per month What is Happy Brews' contribution margin ratio? A. 62.5% B. 37.5% C. 42.5% D. 75%

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter16: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 20E
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Please explain the solution to this general accounting problem using the correct accounting principles.

Happy Brews Coffee Shop sells coffee for $4 per cup. Variable cost | $1.50 per cup Fixed cost | $3,200 per month What is Happy Brews' contribution margin ratio? A. 62.5% B. 37.5% C. 42.5% D. 75%
Transcribed Image Text:Happy Brews Coffee Shop sells coffee for $4 per cup. Variable cost | $1.50 per cup Fixed cost | $3,200 per month What is Happy Brews' contribution margin ratio? A. 62.5% B. 37.5% C. 42.5% D. 75%
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