If the sales mix at Jeffries Corporation shifts to four units of Product A and one unit of Product B, then the weighted-average contribution margin will be

Question

Quizplus · Accepted Answer

We need to find out the weighted-average contribution margin of the sales mix.

Let's assume that the contribution margin of Product A is $40 and the contribution margin of Product B is $20.

Weighted-average contribution margin = (Contribution margin of Product A x Units of Product A sold + Contribution margin of Product B x Units of Product B sold) / Total units sold

If the sales mix is four units of Product A and one unit of Product B, then the calculation for the weighted-average contribution margin would be:

Weighted-average contribution margin = ($40 x 4 + $20 x 1) / 5 = $24

Therefore, the answer is D.

If the Sales Mix at Jeffries Corporation Shifts to Four