Nonesuch Company Sells Only One Product at a Regular Price

Multiple Choice

Nonesuch Company sells only one product at a regular price of $7.50 per unit. Variable expenses are 60 percent of sales and fixed expenses are $30,000. Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales.
What is the contribution margin ratio when the selling price is reduced to $6 per unit?

A) 40%
B) 25%
C) 75%
D) 60%