Question

Barkley Company sells two products, red cups and black mugs. Barkley predicts that it will sell 2.100 red cups and 800 black mugs in the next period. The unit contribution margins for red cups and black mugs are $2.50 and $3.40, respectively. What is the weighted average unit contribution margin? (Round the final answer to the nearest cent.) O A. $3.80 OB. $2.75 OC. $0.94 OD. $6.56

Answer 1

B.$2.75.

weighted average unit contribution margin

=>(2100 red cups *$2.50 contribution + 800 black mugs*$3.40) / (2100+800)

=>7970/2900

=>$2.75.