If sales total $2,000,000, fixed costs total $800,000, and variable costs are 60% of sales, the contribution margin ratio is 40%. True False

True

Explanation:

The computation of contribution margin is shown below:-

Particulars        Amount

Sales $2,000,000

Variable Cost $1,200,000

Contribution Margin $800,000

Contribution Margin Ratio 40 %  ($800,000 ÷ $2,000,000)

Fixed asset $800,000

So, the answer is true

Hence, the given statement is true. The same is to be considered