The variable cost of producing one backpack are $19.?

Question

The variable cost of producing one backpack are $19. The backpack sells for $21. What is the contribution margin ratio? (answer as decimal with 2 decimal places. i.e 0.25)

Answer 1

selling price = 21

-

Variable cost = 19

=

contribution margin = 2$

Contribution margin ratio = CM / Selling price

therefore = 2 / 21 = 0.09