Question

Seascape Company has two products: Product A has a contribution margin per unit of $17 and Product B has a contribution margin of $19 per unit. Calculate the weighted-average unit contribution margin if Seascape has a 40/60 product mix. (Round your answer to 2 decimal places.)

Answer 1

weighted average contribution margin= $18.2

Step-by-step explanation:

Giving the following information:

Product A has a contribution margin per unit of $17 and Product B has a contribution margin of $19 per unit. Seascape has a 40/60 product mix.

To calculate the weighted average contribution margin, we need to use the following formula:

weighted average contribution margin= contribution margin Product A* proportion of sales + contribution margin Product B* proportion of sales

weighted average contribution margin= 17*0.4 + 19*0.6= $18.2