Noel & Vang Company sells only one product at a regular price of $9.00 per unit. Variable expenses are55% of sales, and fixed expenses are $40,000. Management has decided to decrease the selling price toS8.00 in the hope of increasing its volume of sales. What is the contribution margin ratio when the sellingprice is reduced to 8.00 per unit? (Note: Round answer to two decimal places.)a.38.13%b.40.50%c.75.46%d.60.50%

Variable cost per unit = 55% of sales = $9 x 55% = $4.95 per unit

Noel & Vang Company sells only one product at a regular price of $9.00 per unit. Variable expenses are 55% of sales, and fixed expenses are $40,000. Management has decided to decrease the selling price to $8.00 in the hope of increasing its volume of sales. What is the contribution margin ratio when the selling price is reduced to Ss8.00 per unit? (Note: Round answer to two decimal places.) a.38.13% b.40.50% c.75.46% d.60.50%

Noel & Vang Company sells only one product at a regular price of $9.00 per unit. Variable expenses are 55% of sales, and fixed expenses are $40,000. Management has decided to decrease the selling price to $8.00 in the hope of increasing its volume of sales. What is the contribution margin ratio when the selling price is reduced to Ss8.00 per unit? (Note: Round answer to two decimal places.) a.38.13% b.40.50% c.75.46% d.60.50%

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 3BE

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