Gray Company sells two products, X and Y. For the coming year, Gray predicts the sale of 5,000 units of X and 10,000 units of Y. The contribution margins of the two products are $2 and $3, respectively. The weighted-average contribution margin per unit would be $2.50.

Question

Quizplus · Accepted Answer

The weighted-average contribution margin per unit is calculated as: [(5,000 units * $2) + (10,000 units * $3)] / (5,000 units + 10,000 units) = ($10,000 + $30,000) / 15,000 units = $40,000 / 15,000 units = $2.67.

Gray Company Sells Two Products, X and Y