McCoy Brothers manufactures and sells two products,A and Z in the ratio of 5:2.Product A sells for $75;Z sells for $95.Variable costs for product A are $35;for Z $40.Fixed costs are $418,500.Compute the contribution margin per composite unit.
A)$310.
B)$200.
C)$300.
D)$330.
E)$285.

Question

Quizplus · Accepted Answer

Contribution margin per composite unit = (Contribution margin per unit of A * Units of A + Contribution margin per unit of Z * Units of Z) / Total units= ($75 - $35) * 5 + ($95 - $40) * 2 / 5 + 2= $40 * 5 + $55 * 2 / 7= $200 + $110 / 7= $310 / 7= $310

McCoy Brothers Manufactures and Sells Two Products,A and Z in the Ratio