First we will calculate the contribution margin for model as per below:
Contribution margin = Selling price per unit - Variable cost per unit
For Model A12:
Contribution margin = $54 - $39 = $15 per unit
For Model B22:
Contribution margin = $105 - $73 = $32 per unit
For Model C124:
Contribution margin = $411 - $309 = $102 per unit
Now, we will calculate the weighted average contribution margin as per below:
Weighted average unit contribution margin = w1 *c1 + w2*c2 + w3*c3
where, w1,w2, and w3 are the weights of the three models respectively and c1,c2 and c3 are the contribution margins of the products.
Putting the values in the above formula, we get,
Weighted average unit contribution margin = (59% * $15) + (30% * $32) + (11% * $102)
Weighted average unit contribution margin = $8.85 + $9.6 + $11.22 = $29.67
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