Wendall Company Sells Only One Product at a Regular Price

Multiple Choice

Wendall 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 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) 60%
D) 75%