Answer:
The contribution margin ratio is 0.48
Explanation:
The contribution margin ratio is calculated by using following formula:
Contribution margin ratio = (Sales - Total Variable cost)/Sales
Flannigan Company has current sales volume of $4,320,000
The number of products are sold = $4,320,000/$650
Total Variable cost = The number of products are sold x variable costs per unit = $4,320,000/$650 x $338 = $2,246,400
Contribution margin ratio = ($4,320,000 - $2,246,400)/$4,320,000 = 0.48
