what is the contribution margin per unit and contribution margin ratio?
If Cape Cod Railway’s costs total $50,000 per month, the variable passengers is $10 , and tickets sell for $50 , what is the contribution margin per unit and contribution margin ratio?
A. $40 per passenger; 20%
B. $10 per passenger; 80%
C. $10 per passenger; 20%
D. $40 per passenger; 80%
contribution margin per unit = Sales per unit - Variable cost per unit
= $ 50 - $ 10
= $ 40
contribution margin ratio =( contribution margin per unit / Sales per unit ) x 100
= ($ 40 / $ 50) x 100
= 80%
hence option D is correct
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