A weighted average contribution margin is a very useful statistic for a company that has which of the following?
A) A dwindling contribution margin
B) An increasing proportion of fixed costs in its cost structure.
C) Insufficient sales to reach break-even
D) Multiple product lines with a sales mix

Question

Quizplus · Accepted Answer

In working with multiple products and a sales mix of these products, an average contribution margin is very useful and is needed for the break- even calculation. This average contribution margin is called the weighted average contribution margin (WACM).

A Weighted Average Contribution Margin Is a Very Useful Statistic