Answer:
17.3%
Explanation:
The contribution margin ratio is shown below:
Contribution margin ratio = Contribution margin ÷ Sales × 100
where,
Contribution margin is
= Sales - variable cost
Sales arise from passengers ($1,250 × 7,100) $8,875,000
Less:
Food ($7 × 7,100) $497,00
Selling ($90 × 7,100) $639,000
Fuel ($15 × 190,000) $2,850,000
Wages ($20 × 190,000) $3,800,000
Total variable cost ($7,338,700)
Contribution margin $1,536,300
So, the contribution margin ratio is
= $1,536,300 ÷ $8,875,000
= 17.3%
