Homework Answers
| Cheese burger | Regular hamburger | ||
| Selling price | $5 | $4.75 | |
| Variable cost | 2.25 | 1.25 | |
| Contribution margin | $2.75 | $3.5 | |
| Weight | 3/5 | 2/5 | |
| Weighted average contribution margin | $1.65 (2.75*3/5) | $1.4 (3.5*2/5) | $3.05 |
Weighted average contribution margin is $3.05
Hence option A is correct.
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