PhotoMix Corporation produces three products. Cost, price, and volume data is shown below: $\begin{array}{lr}
\text { Total Fixed costs } & \$ 2,400 \
\text { Tax rate } & 40 \%
\end{array}$

$\begin{array}{lrrr}&\text { Picture } & \text { Candle } & \text { CD } \
&\text { Holders } & \text { Holders } & \text { Holders } \
\hline
\text { Normal volume } & 300 & 150 & 200 \
\text { Price per unit } & \$ 5 & \$ 7 & \$ 10 \
\text { Variable cost per unit } & 2 & 3 & 4
\end{array}$ The weighted average contribution margin ratio, rounded to the nearest whole percent, is:
A) 57%
B) 59%
C) 60%
D) Some other number

Question

PhotoMix Corporation produces three products. Cost, price, and volume data is shown below: $\begin{array}{lr}
\text { Total Fixed costs } & \$ 2,400 \
\text { Tax rate } & 40 \%
\end{array}$

$\begin{array}{lrrr}&\text { Picture } & \text { Candle } & \text { CD } \
&\text { Holders } & \text { Holders } & \text { Holders } \
\hline
\text { Normal volume } & 300 & 150 & 200 \
\text { Price per unit } & \$ 5 & \$ 7 & \$ 10 \
\text { Variable cost per unit } & 2 & 3 & 4
\end{array}$ The weighted average contribution margin ratio, rounded to the nearest whole percent, is:
A) 57%
B) 59%
C) 60%
D) Some other number

Quizplus · Accepted Answer

The weighted average contribution margin ratio is calculated by taking the contribution margin of each product, multiplying it by its sales mix percentage, and then summing these values. The contribution margin for each product is calculated as (Price - Variable Cost) / Price. The sales mix percentage is the proportion of each product's sales volume to the total sales volume.

PhotoMix Corporation Produces Three Products Total Fixed costs $2,400 Tax rate 40%\begin{array}{lr}\text { Total Fixed costs } & \$ 2,400 \\\text { Tax rate } & 40 \%\end{array} Total Fixed costs Tax rate ​$2,40040%​

PhotoMix Corporation Produces Three Products $\begin{array}{lr}\text { Total Fixed costs } & \$ 2,400 \\\text { Tax rate } & 40 \%\end{array}$