NoFly Corporation sells three different models of a mosquito
“zapper.” Model A12 sells for $50 and has variable costs of $35.
Model B22 sells for $100 and has variable costs of $70. Model C124
sells for $400 and has variable costs of $300. The sales mix of the
three models is A12, 60%; B22, 15%; and C124, 25%.
What is the weighted-average unit contribution margin?
(Round answer to 2 decimal places, e.g.
15.50.)
Weighted-Average Unit Contribution Margin |
Ans. | Model A12 | Model B22 | Model C124 | |
Selling price per unit | $50.00 | $100.00 | $400.00 | |
Less: Variable cost per unit | -$35.00 | -$70.00 | -$300.00 | |
Contribution margin per unit | $15.00 | $30.00 | $100.00 | |
Particulars | Contribution margin per unit (a) | Sales mix (b) | Contribution margin (a*b) | |
Model A12 | $15.00 | 0.60 | $9.00 | |
Model B22 | $30.00 | 0.15 | $4.50 | |
Model C124 | $100.00 | 0.25 | $25.00 | |
Total | 1.00 | $38.50 | ||
Weighted contribution margin = Total contribution margin / Total sales mix | ||||
$38.50 / 1.00 | ||||
$38.50 | per unit | |||
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