Answer:
= 60%
Explanation:
Contribution ratio represents the marginal benefits of producing an extra unit. It is calculated by the formula.
CM ration= Contribution margin/ sales revenue
Contribution margin = sales - varible costs
therefore contribution margin ratio= sales -revenue/ sales x 100
=$20,000 - $ 8000/ 20,000 x 100
= 12000/20000 x 100
=0.6 x 100
= 60%
