Compute and interpret the contribution margin ratio using the following data: sales, $6,000; total variable cost, $3,000.

The contribution margin ratio is 0.5

Explanation:

In order to calculate the contribution margin ratio we will use the formula

(Sales- Variable cost)/Sales=Contribution margin ratio

Sales = 6,000

Variable cost = 3,000

We will input these values in the formula.

(6,000-3,000)/6,000=3,000/6,000=0.5

cognitive overload: having a lot on your mind impairs decision-making and tends to result in the simplest, but not necessarily best, option being selected.

empathy gaps: overlooking how you might feel in a different situation can result in unnecessary purchases, such as overbuying when shopping for food on an empty stomach.

optimism and overconfidence: wearing rose-tinted glasses and having unrealistic expectations about the future can affect money management and leave you unprepared for a change in circumstance.

instant gratification: seeking instant gratification drives impulsive spending and can undermine long-term planning and savings.

harmful habits: automatic or mindless behaviour can amplify a poor financial decision as it becomes a recurring event.

social norms: we are heavily influenced by the actions of others; while this can be in certain circumstances, it also contributes to the pressure to keep up with the joneses through conspicuous consumption.