Gray Company sells two products, X and Y. For the coming year, Gray predicts the sale of 10,000 units of X and 20,000 units of Y. The contribution margins of the two products are $4 and $6, respectively. The weighted average contribution margin per unit would be $5.00.

Question

Quizplus · Accepted Answer

The weighted average contribution margin per unit would be [(10,000 x $4) + (20,000 x $6)] / (10,000 + 20,000) = $5.33, not $5.00. So, the statement is false.

Gray Company Sells Two Products, X and Y