Contribution margin means sales price less variable costs.Contribution represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs. Contribution margin ratio means the difference between a company's sales and variable expenses, expressed as a percentage. The contribution margin ratio is a formula that calculates the percentage of contribution margin relative to net sales, put into percentage terms. To Calculate: The contribution margin and contribution margin ratio calculated is asked to be calculated in the specific question.

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Chapter 21, Problem 8E

To determine

Contribution margin means sales price less variable costs.Contribution represents the portion of sales revenue that is not consumed by variable costs and so contributes to the coverage of fixed costs.

Contribution margin ratio means the difference between a company's sales and variable expenses, expressed as a percentage.

The contribution margin ratio is a formula that calculates the percentage of contribution margin relative to net sales, put into percentage terms.

To Calculate: The contribution margin and contribution margin ratio calculated is asked to be calculated in the specific question.

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