Question

No Fly Corporation sells three different models of a mosquito "zapper." Model A12 sells for $55 and has variable costs of $40. Model B22 sells for $107 and has variable costs of $79. Model C124 sells for $414 and has variable costs of $307. The sales mix of the three models is A12, 55%; B22, 29%; and C124, 16%. What is the weighted-average unit contribution margin

Answer 1

The weighted-average unit contribution margin is $33.49 per unit

Step-by-step explanation:

We know that,

Weighted average Contribution margin per unit = (Selling price per unit - Variable expense per unit) × sales mix

For A12 = ($55 - $40) × 55% = $8.25

For B22 = ($107- $79) × 29% = $8.12

For C124 = ($414 - $307) × 16% = $17.12

So, the total would be equal to

= $8.25 + $8.12 + $17.12

= $33.49 per unit