No Fly Corporation sells three different models of a mosquito "zapper." Model A12 sells for $55 and has variable costs of $40. Model B22 sells for $107 and has variable costs of $79. Model C124 sells for $414 and has variable costs of $307. The sales mix of the three models is A12, 55%; B22, 29%; and C124, 16%. What is the weighted-average unit contribution margin

Question

Dayton

Business

16 March, 02:39

No Fly Corporation sells three different models of a mosquito "zapper." Model A12 sells for $55 and has variable costs of $40. Model B22 sells for $107 and has variable costs of $79. Model C124 sells for $414 and has variable costs of $307. The sales mix of the three models is A12, 55%; B22, 29%; and C124, 16%. What is the weighted-average unit contribution margin

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Isabelle Sexton · Answer 1

The weighted-average unit contribution margin is $33.49 per unit

Explanation:

We know that,

Weighted average Contribution margin per unit = (Selling price per unit - Variable expense per unit) * sales mix

For A12 = ($55 - $40) * 55% = $8.25

For B22 = ($107 - $79) * 29% = $8.12

For C124 = ($414 - $307) * 16% = $17.12

So, the total would be equal to

= $8.25 + $8.12 + $17.12

= $33.49 per unit