Question

Smarty Pants Company sells two​ products, green camouflage pants and orange camouflage pants. Smarty Pants predicts that it will sell 800 pairs of green pants and 1 comma 500 pairs of orange pants in the next period. The unit contribution margins for green pants and orange pants are $ 7.25 and $ 9.00​, respectively. What is the weighted average unit contribution​ margin? (Round the final answer to the nearest​ cent.)

Answer 1

The weighted average unit contribution​ margin is 7,92

Step-by-step explanation:

The weighted average unit contribution​ margin is the sum of the contribution margin of each product multiplied by the quantity sold of that product , then divided by the sum of all the products.

CM average=(CMᵃ * Qᵃ+CMᵇ * Qᵇ)/(Qᵃ+Qᵇ)

CM average=($ 7.25 * 800+$ 9.00 * 500)/(800+500)

CM average=($5800+$4500)/(1300)

CM average=7,92