Question

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

Answer 1

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