Purely Pizza Company sells pizzas in two different sizes-medium and large. The number of medium pizzas sold is twice the number of large pizzas sold. The contribution margin of a medium pizza is $10 and the contribution margin of a large pizza is $16. The weighted average contribution margin is $15.

Question

Quizplus · Accepted Answer

Let's assume that the number of large pizzas sold is x. Then, the number of medium pizzas sold is 2x.
Contribution margin of a medium pizza = $10
Contribution margin of a large pizza = $16
To calculate the weighted average contribution margin, we use the formula:
Weighted average contribution margin = (Contribution margin of medium pizzas * Number of medium pizzas sold) + (Contribution margin of large pizzas * Number of large pizzas sold) / (Total number of pizzas sold)
$15 = (10 * 2x) + (16 * x) / (3x)
45x = 32x + 30x
45x = 48x
3x = 0
x = 0
This means that no large pizzas were sold, which contradicts the given information. Therefore, the answer is false.

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