A product sells for $5, and has unit variable costs of $3. This product accounts for $20,000 in annual sales, out of the firm's total of $60,000. When performing multiproduct break-even analysis, the weighted contribution of this product is approximately
A) 0.133
B) 0.200
C) 0.40
D) 0.667
E) $1.667

Question

Quizplus · Accepted Answer

Weighted contribution = (Contribution margin / Total sales) * Sales of the product= ((5 - 3) / 60,000) * 20,000= (2 / 60,000) * 20,000= 0.133

A Product Sells for $5, and Has Unit Variable Costs