Darth Company sells three products. Sales and contribution margin ratios for the three products follow: Given these data, the contribution margin ratio for the company as a whole would be:

A. 25%

Explanation:

The Contribution margin for the whole company =

Total Contribution Margin = (0.45 * 25,000) + (0.4 * 40,000) + ( 0.15 * 100,000)

= 9,000+16,000+15,000

= $40,000

Total Sales = 20,000+40,000+100,000

= $160,000

Contribution Margin for the whole Company =

= 25%

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