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satinwood company sells true product finishes mahogany Aspen satinwood predicts that will sell 72 units of...

satinwood company sells true product finishes mahogany Aspen satinwood predicts that will sell 72 units of mahogany and 5600 units of Aspen and the next. The unit contribution margin are 3.15 and 6.30 r e s p e c t i v e l y what is the weighted average unit contribution margin

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Weighted average unit contribution margin: It is calculated by dividing the aggregate of units of different products multiplied with contribution margin per unit of the respective product by the total number of units sold of all products taken together.

Formula:

Weighted average unit contribution margin = [(Total number of units sold of mahogany X Contribution per unit of mahogany) + (Total number of units sold of Aspen X Contribution per unit of Aspen)]/ (Total number of units sold of mahogany + Total number of units sold of Aspen)

                                    = [(72 units X $ 3.15 per unit) + (5,600 units X $ 6.30 per unit)]/ (72 units + 5,600 units)

                                      = [$ 226.80 + $ 35,280]/ 5,672 units

                                       = $ 35,506.80/ 5,672 units

                                       = $ 6.26

Therefore the weighted average unit contribution margin of Satinwood Company is $ 6.26.

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