Questions: Multiple Choice Question Spice sells paprika for 9.00 per bottle. Variable cost is 2.43 per bottle and Spice's annual fixed costs are 825,000. The variable expense ratio for paprika is 100% 73% 54% 27%

Multiple Choice Question

Spice sells paprika for 9.00 per bottle. Variable cost is 2.43 per bottle and Spice's annual fixed costs are 825,000. The variable expense ratio for paprika is

100%
73%
54%
27%

Transcript text: Multiple Choice Question Spice sells paprika for $\$ 9.00$ per bottle. Variable cost is $\$ 2.43$ per bottle and Spice's annual fixed costs are $\$ 825,000$. The variable expense ratio for paprika is $\qquad$ 100\% $73 \%$ 54\% 27\%

Solution

Solution Steps

To find the variable expense ratio, we need to calculate the ratio of the variable cost per bottle to the selling price per bottle. This ratio is expressed as a percentage.

Step 1: Calculate the Variable Expense Ratio

To find the variable expense ratio, we use the formula:

\[ \text{Variable Expense Ratio} = \frac{\text{Variable Cost per Bottle}}{\text{Selling Price per Bottle}} \times 100 \]

Substituting the given values:

\[ \text{Variable Expense Ratio} = \frac{2.43}{9.00} \times 100 \]

Step 2: Perform the Calculation

Calculating the above expression:

\[ \text{Variable Expense Ratio} = \frac{2.43}{9.00} \approx 0.27 \times 100 = 27.0\% \]