Grantham Company sells two products,X and Y.For the coming year,Grantham predicts sales of 5,000 units of X and 10,000 units of Y.The contribution margins of the two products are $5 and $4,respectively.The weighted-average contribution margin is $6.50.

Question

Quizplus · Accepted Answer

Sales mix = 5,000:10,000 = 1:2
Total contribution per unit of the X and Y = ($5 × 1)+ ($4 × 2)= $13
Weighted-average contribution margin per unit = $13 per unit / 3 units = $4.33

Grantham Company Sells Two Products,X and Y