The percentage of contribution margin is 34%.
Revenue = $500,000 and
the contribution margin ratio is (Revenue - Variable Costs) / Revenue.
Costs Variable = $330,000
Therefore, the contribution margin ratio is equal to (500,000 - 330,000) / 500,000, or 34%.
The contribution margin ratio has been defined by the percentage difference between a company's sales and variable costs. An entity's total margin is a representation of the total income that can be used to pay for fixed expenditures and generate a profit.
When used to describe a single unit sale, the ratio conveys the amount of profit made from that specific sale.
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