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Grand Gimmicks Company produces a single product with a current selling price of $170. Variable costs are $130 per unit, and fixed costs per month average $6,240. Management is considering increasing the selling price to $190 per unit. Assume that the variable cost per unit of the product and monthly fixed expenses will not change as a result of the proposed increase in selling price.
Problem 1: At the proposed increased selling price of $190 per unit, the contribution margin ratio is closest to
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