Question

RachelRachel

runs her own hot dog stand on the U of A campus. The monthly cost of the cart rental and business permit is

$ 300

RachelRachel​'s

contribution margin is

$ 1.50

per hot dog sold. She has recently added individual servings of potatos chips to her product offering. Each bag of potato chips has a contribution margin of

$ 0.75

per bag.

Rachel

sells

5

bags of potato chips for every

10

hot dogs.

1.	What is RachelRachel​'s ​weighted-average contribution margin per​ unit?
2.	How many total units much Rachel sell in a month to earn a target monthly profit of $ 900​?
3.	Of the total units needed to earn $ 900 of​ profit, how many are hot dogs and how many are bags of potato​ chips?

1. What is

Rachel

​weighted-average contribution margin per​ unit? ​(Round the​ weighted-average contribution margin per unit to the nearest​ cent, ".XX".)

	Hotdogs	Potato chips	Total in "basket"
Contribution margin per unit
Multiply by: Sales mix (number of units in "basket")
Contribution margin
Weighted-average contribution margin per unit

Answer 1