Answer the following questions using the information below:
The following information is for Alex Corp:

-If the sales mix shifts to one unit of Product X and two units of Product Y, then the weighted-average contribution margin will ________.
A) increase per unit
B) stay the same
C) decrease per unit
D) decrease by $0.50 per unit

Question

Answer the following questions using the information below:
The following information is for Alex Corp:
 
-If the sales mix shifts to one unit of Product X and two units of Product Y, then the weighted-average contribution margin will ________.
A) increase per unit 
B) stay the same 
C) decrease per unit 
D) decrease by $0.50 per unit

Quizplus · Accepted Answer

Without specific numbers for the contribution margins of Product X and Product Y, we can't calculate the exact change in the weighted-average contribution margin. However, the question implies a change in the sales mix, which would affect the weighted-average contribution margin per unit. If the sales mix shifts in a way that increases the proportion of a product with a higher contribution margin, the weighted-average contribution margin per unit will increase. Conversely, if the mix shifts towards a product with a lower contribution margin, the weighted-average will decrease. The correct answer depends on the relative contribution margins of Product X and Product Y, but given only the options provided, the best inference is that the shift described would lead to an increase in the weighted-average contribution margin per unit, assuming Product X has a higher contribution margin than Product Y.

Answer the Following Questions Using the Information Below