Crusher Machinery Inc. sells three heavy-duty construction machines. Information on these machines is as follows: Based on this information, what is the weighted-average contribution margin per unit (WACM)?

Question

Crusher Machinery Inc. sells three heavy-duty construction machines. Information on these machines is as follows:  Based on this information, what is the weighted-average contribution margin per unit (WACM)?

Quizplus · Accepted Answer

The weighted average contribution margin (WACM) is calculated as: (CM x Sales mix for bulldozer) + (CM x Sales mix for crane) + (CM x Sales mix for dump truck), or ($40 x .30) + ($45 x .50) + ($50 x .20) = $12.00 + $22.50 + $10.00 = 0.445, or $44.50.