Purely Pizza Company sells pizzas in two different sizes-medium and large. The two products sell in equal numbers. The contribution margin of a medium pizza is $12 and the contribution margin of a large pizza is $18. The weighted average contribution margin is $15.

Question

Quizplus · Accepted Answer

The weighted average contribution margin is calculated as (contribution margin of medium pizza + contribution margin of large pizza)/2, which in this case is [(12+18)/2] = $15. Therefore, the statement is true.

Purely Pizza Company Sells Pizzas in Two Different Sizes-Medium and Large