Question

NoFly Corporation sells three different models of a mosquito “zapper.” Model A12 sells for \$50 and...

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

Earn Coins

Coins can be redeemed for fabulous gifts.