Question

Concord Corporation sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $30 and a selling price of $90. Q-Drive Plus has variable costs per unit of $60 and a selling price of $135. The weighted-average unit contribution margin for Concord is

Answer 1

The weighted-average unit contribution margin for Concord is $70.50

Step-by-step explanation:

For computing the weighted-average unit contribution margin , first we have to compute the contribution margin which is shown below:

Contribution margin per unit = Selling price per unit - Variable expense per unit

For Q- drive, it will be

= $90 - $30

= $60 per unit

And, for Q-drive plus,

= $135 - $60

= $75 per unit

Now the weighted-average unit contribution margin equal to

= Weighted sales mix × contribution margin + Weighted sales mix × contribution margin

= 30% ×$60 + 70% × $75

= $18 + $52.50

=$70.50 per unit