Coffee Klatch is an espresso stand in a downtown office building. The average selling price of a cup of coffee is $1.49 and the averagevariable expense per cup is $0.36. The average fixed expense per month in $1,300. An average of 2,100 cups are sold each month. What is the Cm Ratio for Coffee Klatch a. 1.319 b. 0.758 c. 0.242 d. 4.139

The Cm Ratio for Coffee Klatch is b. 0.758

Explanation:

The contribution margin ratio is calculated by using following formula:

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

The average selling price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.  An average of 2,100 cups are sold each month.

Total sales = $1.49 x 2,100 = $3,129

Total Variable cost = $0.36 x 2,100 = $756

Contribution margin ratio = ($3,129 - $756)/$3,129 = 0.758

answer; dividing net income by 1- t ;

the answer would be price fixing, hope it