Question
In: Accounting
The Winner's Circle sells two products, medals and trophies. The Winner's Circle predicts that it will...
The Winner's Circle sells two products, medals and trophies. The Winner's Circle predicts that it will sell 25000 medals and 5300 trophies in the next period. The unit contribution margins for medals and trophies are $ 5.00 and $ 14.75, respectively. What is the weighted average unit contribution margin?
Solutions
Expert Solution
- All working forms part of the answer
- Working
Total of Sales mix = 25000 + 5300 = 30,300
|
Medals |
Trophies |
Total |
|
|
Unit Contribution margin |
$ 5.00 |
$ 14.75 |
|
|
Weighted Average unit contribution margin |
$ 4.13 [=$ 5 x (25000/30300) ] |
$ 2.58 [=$ 14.75 x (5300/30300) ] |
$ 6.71 |
- Answer: Weighted Average Unit Contribution margin = $ 6.71 per unit
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