Mist Company sells two products-A and B. Mist predicts that it will sell 2 500 units of A and 1 500 units of B during the next period. The unit contribution margins are $3.50 and $4.80, respectively. What is the weighted- average unit contribution margin? (Please round to nearest cent.)

Question

Quizplus · Accepted Answer

The weighted-average unit contribution margin is calculated by multiplying each product's contribution margin by its proportion of total sales, then summing these amounts. For product A: (2500 units * $3.50) = $8750. For product B: (1500 units * $4.80) = $7200. Total units = 2500 + 1500 = 4000. Weighted-average = ($8750 + $7200) / 4000 = $3.99.

Mist Company Sells Two Products-A and B