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Safari File Edit ViewHistory Bookmarks Window Help canvas.umd.umích.edu Twitter / Settings Quiz: Quiz 4 Chapter 5 Dashe Shopify 1:4 DQuestion 7 2 pts 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 contribution margin ratio (rounded to two decimal places)? 38% 62% 040% 060% o 50% Quiz saved at 11:09am Submit Quiz 17

Explanation / Answer

Jungle gyms Tree houses Total Units sold 12000 8000 Sales 1440000 1600000 3040000 Contribution margin 30 100 Total Contribution margin 360000 800000 1160000 New CM ratio=1160000/3040000= 38% Option 1 is correct

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