Question

Suppose that a firm makes two products, A and B. The sales mix in units for the period is 70% for A and 30 % for B. If the unit contribution margin for A is $8.75 and the unit contribution margin for B is $5.31, then the weighted-average unit contribution margin is: (Input your answer using two decimal places. Do not use commas or dollar signs. Don't round any intermediate calculations).

Answer 1

The weighted-average unit contribution margin is $7.718.

Step-by-step explanation:

A firm makes two products, A and B.

The sales mix in units for the period is 70% for A and 30 % for B.

The unit contribution margin for A is $8.75 and the unit contribution margin for B is $5.31.

The weighted-average unit contribution margin is

=
`70\%\ *\ 8.75\ +\ 30\%\ *\ 5.31`

= 6.125 + 1.593

= 7.718