Control Questions Coffee Klatch is a coffee shop in the city centre. The average selling price of a cup of coffee is 1.49 and the average variable cost per cup is 0.36 The average fixed cost per month is 1,300 An average of 2100 cups of coffee are sold each month. What is the contribution margin ratio of Coffee Klatch? a. 1.31 g b. 0.758 c. 0.242 d 4139

To find the contribution margin ratio, we need to calculate the difference between the average selling price and the average variable cost per cup of coffee, and then divide it by the average selling price.<br /><br />The average selling price of a cup of coffee is $1.49, and the average variable cost per cup is $0.36. Therefore, the contribution margin per cup is:<br /><br />Contribution Margin per Cup = Average Selling Price - Average Variable Cost<br />Contribution Margin per Cup = $1.49 - $0.36<br />Contribution Margin per Cup = $1.13<br /><br />The contribution margin ratio is calculated as follows:<br /><br />Contribution Margin Ratio = Contribution Margin per Cup / Average Selling Price<br />Contribution Margin Ratio = $1.13 / $1.49<br />Contribution Margin Ratio ≈ 0.758<br /><br />Therefore, the correct answer is option b. 0.758.