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Suppose that a firm makes two products, A and B. The sales mix in units for...

Suppose that a firm makes two products, A and B. The sales mix in units for the period is 70% for A and 30 % for B. If the unit contribution margin for A is $8.23 and the unit contribution margin for B is $5.25, then the weighted-average unit contribution margin is:

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Answer #1

Weighted Average Contribution Margin

= ( sales Mix of A *Unit Contribution Margin of A ) + (Sales Mix of B * weighted Average Contribution Margin of B)

Weighted Average Contribution MArgin = (70%*8.23)+(30*5.25) = $7.336 (Answer) (or) 7.34

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