The Following Is Allison Corporation's Contribution Format Income Statement for Last

The following is Allison Corporation's contribution format income statement for last month:
$\begin{array}{|l|r|}\hline \text { Sales } & \$ 800,000 \\\hline \text { Less: variable expenses } & \underline{300,000} \\\hline \text { Contribution margin } & 500,000 \\\hline \text { Less: fixed expenses } & \underline{400,000} \\\hline \text { Operating income } & \$ 100,000 \\\hline\end{array}$ The company has no beginning or ending inventories. The company produced and sold 10,000 units last month.


-What is the company's contribution margin ratio?

A) 62.5%.
B) 160%.
C) 500%.
D) 20%.

Correct Answer:

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