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love history [14]
3 years ago
11

Terry’s Frame & Art Shoppe produces and sells picture frames to clients at $8.00 per picture frame. The variable cost to pro

duce each picture frame is $3.25. The fixed costs are $3,000 per month. What is the firm’s contribution margin per picture frame?
Business
1 answer:
Pavel [41]3 years ago
3 0

Answer:

59.375%

Explanation:

Mathematically, the contribution margin ratio can be solved using the following formula;

(Sales-variable cost)/sales * 100%

According to the question, the sales is $8 per picture, while the variable cost is $3.25

The contribution margin ratio is thus:

(8-3.25)/8 * 100/1

4.75/8 * 100% = 59.375%

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\text{Hello there!}

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