Question
In: Accounting
X Company estimates the following for its three products, A, B, and C, for 2018: A ...
X Company estimates the following for its three products, A, B, and C, for 2018:
| A | B | C | |
| Revenue | $74,115 | $28,501 | $41,976 |
| Total variable costs | 38,002 | 20,280 | 19,668 |
Fixed costs in 2018 are expected to be $19,800. What is the
expected weighted average contribution margin rate in 2018?
Solutions
Expert Solution
| CALCULATION OF WEIGHTED AVERAGE CONTRIBUTION MARGIN | |||||
| A | B | C | Total | ||
| Revenue | $ 74,115 | $ 28,501 | $ 41,976 | $ 1,44,592 | |
| Less: Total Variable Cost | $ 38,002 | $ 20,280 | $ 19,668 | $ 77,950 | |
| Contribution Margin | $ 36,113 | $ 8,221 | $ 22,308 | $ 66,642 | |
| Ratio of Sales =(B) | 51.26% | 19.71% | 29.03% | ||
| ($ 74,115/$144,592) | ($ 28,501 / $144,592) | ($ 41,976 / $144,592) | |||
| Weighted Average Contribution =(AXB) | $ 18,510.81 | $ 1,620.47 | $ 6,476.16 | $ 26,607.44 | |
| Weighted Average Contribution Margin = Weighted average contribution / Total Revenue | |||||
| Weighted Average Contribution Margin = | 0.1840 | ||||
| Weighted Average Contribution Margin % = | 18.40% | ||||
ekkarill92 answered 1 year agoRelated Solutions
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