Mist Company sells two products,blue bowls and green cups.Mist predicts that it will sell 2,500 blue bowls and 1,500 green cups in the next period.The unit contribution margins for blue bowls and green cups are $3.60 and $4.80,respectively.What is the weighted-average unit contribution margin?

Question

Quizplus · Accepted Answer

To calculate the weighted-average unit contribution margin, we first need to calculate the total contribution margin for each product:

Blue bowls: 2,500 units x $3.60 = $9,000
Green cups: 1,500 units x $4.80 = $7,200

Then, we add the two contribution margins together:

$9,000 + $7,200 = $16,200

To get the weighted-average unit contribution margin, we divide the total contribution margin by the total number of units:

$16,200 / (2,500 + 1,500) = $4.05

Therefore, the correct answer is D.

Mist Company Sells Two Products,blue Bowls and Green Cups