Multiple Choice
Dirth Company sells only one product at a regular price of $7.50 per unit. Variable expenses are 60% 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) 25%
B) 40%
C) 75%
D) 60%
Correct Answer:
Verified
Correct Answer:
Verified
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