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

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

years agooo ahaha. but honestly they need to update ! : )