Mist Company sells two products-A and B. Mist predicts that it will sell 2,500 units of A and 1,500 units of B during the next period. The unit contribution margins are $3.50 and $4.80, respectively. What is the weighted-average unit contribution margin?

Question

Quizplus · Accepted Answer

The weighted-average unit contribution margin is calculated by multiplying each product's contribution margin by its proportion of total sales, then summing these amounts: [(2500 * $3.50) + (1500 * $4.80)] / (2500 + 1500) = $3.99 per product.

Mist Company Sells Two Products-A and B