The contribution margin for Product X is $80 and for Product Y $120 and the product mix is 3 Product X models for each Product Y model. The weighted average contribution margin per unit is:

Question

Quizplus · Accepted Answer

The weighted average contribution margin per unit is calculated by taking the total contribution margin of all products and dividing it by the total number of units. For every 4 units (3X + 1Y), the total contribution margin is (3*$80) + (1*$120) = $240 + $120 = $360. Dividing this by the total units (4) gives a weighted average contribution margin of $90 per unit.

The Contribution Margin for Product X Is $80 and for Product