Water Sports, Inc. sells two types of canoes, the Deluxe model and the Super model. The following segmented contribution margin statement shows the results of the most recent period. What is the weighted unit contribution margin?

Question

Water Sports, Inc. sells two types of canoes, the Deluxe model and the Super model. The following segmented contribution margin statement shows the results of the most recent period.  What is the weighted unit contribution margin?

Quizplus · Accepted Answer

To find the weighted unit contribution margin, we need to calculate the contribution margin per unit for each canoe model and then multiply it by the proportion of units sold for that model. 
For the Deluxe model: 
contribution margin per unit = selling price - variable cost per unit = $375 - $220 = $155 
proportion of units sold = 450/900 = 0.5 
weighted contribution margin per unit for Deluxe model = $155 x 0.5 = $77.5

For the Super model: 
contribution margin per unit = selling price - variable cost per unit = $475 - $300 = $175 
proportion of units sold = 450/900 = 0.5 
weighted contribution margin per unit for Super model = $175 x 0.5 = $87.5

weighted unit contribution margin = weighted contribution margin per unit for Deluxe model + weighted contribution margin per unit for Super model 
= $77.5 + $87.5 
= $165

Therefore, the answer is B) $9.32.