Jamal & Co. makes and sells two types of shoes, Plain and Fancy. Data concerning these products are as follows: $$\begin{array} { l c l }
& \text { Plain } & \text { Fancy } \
\text { Unit selling price } & \$ 20.00 & \$ 35.00 \
\text { Variable cost per unit } & 12.00 & 24.50
\end{array}$$ Sixty percent of the unit sales are Plain, and annual fixed expenses are $45,000.
The weighted-average unit contribution margin is:

Question

Jamal & Co. makes and sells two types of shoes, Plain and Fancy. Data concerning these products are as follows: $$\begin{array} { l c l } 
& \text { Plain } & \text { Fancy } \
\text { Unit selling price } & \$ 20.00 & \$ 35.00 \
\text { Variable cost per unit } & 12.00 & 24.50
\end{array}$$ Sixty percent of the unit sales are Plain, and annual fixed expenses are $45,000.
The weighted-average unit contribution margin is:

Quizplus · Accepted Answer

The weighted-average unit contribution margin is calculated by taking the contribution margin of each product, multiplying by their respective sales mix, and summing them up. For Plain: $20 - $12 = $8; for Fancy: $35 - $24.50 = $10.50. Weighted average = (0.6 * $8) + (0.4 * $10.50) = $9.00.

Jamal & Co Sixty Percent of the Unit Sales Are Plain, and Annual