Yerke Company Makes Jungle Gyms and Tree Houses for Children

Multiple Choice

Yerke Company makes jungle gyms and tree houses for children.For jungle gyms, the price is $120 and variable expenses are $90 per unit.For tree houses, the price is $200 and variable expenses are $100.Total fixed expenses are $253,750.Last year, Yerke sold 12,000 gyms and 4,000 tree houses.Now suppose that Yerke expects tree house demand to increase from 4,000 to 8,000 units.
-What is the new (combined, overall or package) contribution margin ratio (rounded to two decimal places) ?

A) 38%
B) 62%
C) 40%
D) 60%
E) 50%