Question

a company sells two models of a product—basic and premium. the basic model has a contribution margin per unit of $25 and unit sales of 750. the premium model has a contribution margin per unit of $40 and unit sales of 250. fixed costs are $15,000. the weighted average contribution margin in units is

Answer 1

The weighted average contribution margin per unit, calculated by dividing the total contribution from both models by the total unit sales, is $28.75 per unit.

Step-by-step explanation:

To calculate the weighted average contribution margin per unit, we first multiply the contribution margin per unit for each product by its respective unit sales, and then sum these products for both the basic and premium models. Afterward, we divide this sum by the total unit sales of both models to find the average.

Total contribution from both models: $18,750 (basic) + $10,000 (premium) = $28,750

Total unit sales: 750 (basic) + 250 (premium) = 1,000 units

The weighted average contribution margin per unit is thus $28,750 ÷ 1,000 units = $28.75 per unit.

Answer 2

521

Step-by-step explanation: