Lee Industry's sales are $525,000, variable costs are 53% of sales, and operating income is $19,000. What is the contribution margin ratio?

A) 47%
B) 26.5%
C) 9.5%
D) 53%

Contribution Margin Ratio

The ratio of contribution margin (sales minus variable costs) to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and profit.

Operating Income

Operating income, similar to income from operations, is the profit earned from a firm's normal core business operations.

Variable Costs

Costs that vary directly with the level of production or sales activity.