Question

Boyze Company manufactures and sells two products: Good and Better. Fixed costs are $3,315,000, and data about the products follow.

Good   Better
Sales Mix   60%   40%
Selling Price   $250   $350
Unit Variable costs   $100   $150
What is the weighted-average unit contribution margin?

Group of answer choices

$350

$175

$180

$170

Answer 1

Boyze company :

	Good	Better
Selling price	$ 250	$ 350
Less: Variable cost	($ 100)	($ 150)
Contribution margin	$ 150	$ 200

Weighted average contribution margin per unit : Contribution margin per unit of Good × Sales mix of Good + Contribution margin per unit of Better × Sales mix of Better

Weighted average contribution margin per unit = $ 150 × 60% + $ 200 × 40%

= $ 90 + $ 80

= $ 170

Weighted average contribution margin per unit = $ 170.

Hence, Last option is correct.