Jackie's Snacks sells fudge, caramels, and popcorn. It sold 12,000 units last year. Popcorn outsold fudge by a margin of 2 to 1. Sales of caramels were the same as sales of popcorn. Fixed costs for Jackie's Snacks are $14,000. Additional information follows: The weighted average contribution margin for the three products of Jackie's Snacks is

Question

Jackie's Snacks sells fudge, caramels, and popcorn. It sold 12,000 units last year. Popcorn outsold fudge by a margin of 2 to 1. Sales of caramels were the same as sales of popcorn. Fixed costs for Jackie's Snacks are $14,000. Additional information follows:  The weighted average contribution margin for the three products of Jackie's Snacks is

Quizplus · Accepted Answer

Let x be the number of units sold for fudge.
By the given information:

- Popcorn sold twice as much as fudge, so the number of units sold for popcorn is 2x.
- Caramels sold as much as popcorn, so the number of units sold for caramels is also 2x.

Therefore, the total number of units sold is:

x + 2x + 2x = 12,000

Solving for x, we get:

x = 2,400

So, the number of units sold for each product is:

- Fudge: 2,400 units
- Popcorn: 4,800 units
- Caramels: 4,800 units

The contribution margin for each product is:

- Fudge: $0.50
- Popcorn: $1.00
- Caramels: $2.50

The weighted average contribution margin is:

(2400 * 0.50 + 4800 * 1.00 + 4800 * 2.50) / 12000 = $2.00

Therefore, the best choice for the weighted average contribution margin is C, $2.00.

Jackie's Snacks Sells Fudge, Caramels, and Popcorn