Question

# company X sells two products, sales of product A are 1000 units at \$10 per unit...

company X sells two products, sales of product A are 1000 units at \$10 per unit and sales of product B are 3000 units at \$15 per unit. the contribution margin per unit of product A is \$4 and of product B is \$2. What is the contribution margin per unit of the sales mix?

Sales Value – Product A = (1,000 Units x \$10) = \$10,000

Sales Value – Product B = (3,000 Units x \$15) = \$45,000

Total Sales Value = (\$10,000 + 45,000) = \$55,000

Sales Mix – Product A = (\$10,000 / 55,000) x 100 = 18.18%

Sales Mix – Product B = (\$45,000 / 55,000) x 100 = 81.82%

Contribution margin per unit of the sales mix = (Contribution per unit Product-A x Sales Mix Product-A) + (Contribution per unit Product-B x Sales Mix Product-B)

= (\$4 x 0.1818) + (\$2 x 0.8182)

= \$0.73 + \$1.64

= \$2.36 per unit.

“Therefore, Contribution margin per unit of the sales mix = \$2.36 per unit”

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