Dairy Days Ice Cream sells ice cream cones for $4 per customer. Variable costs are $3 per cone. Fixed costs are $2,500 per month. What is Dairy Days' contribution margin ratio?
A) 267%
B) 25%
C) 2%
D) 63%
B
Explanation: B)
Sales $4
Less Variable costs 3
= Contribution Margin 1 divided by $4 sales = 25%
Business
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