Question

Barkley Company sells two​ products, red cups and black mugs. Barkley predicts that it will sell

2,600 red cups and 700black mugs in the next period. The unit contribution margins for red cups and black mugs are

$ 3.00 and $ 3.90 respectively. What is the weighted average unit contribution​ margin? (Round the final answer to the nearest​ cent.)

A.$ 11.14

B.$ 4.05

C.$ 0.83

D.$ 3.19

Answer 1

D.$ 3.19

Working:

Step-1;Calculation of Weight of Each Product
	Product		Units sold	Weight
			a	b=a/3300
	Red Cups		2,600	0.79
	Black Mugs		700	0.21
	Total		3,300	1.00
Step-2:Calculation of weighted Average Contribution
	Product		Weight	Contribution		Weighted Average Contribution
			a	b		a*b
	Red Cups		0.79	$       3.00		$       2.36
	Black Mugs		0.21	$       3.90		$       0.83
	Total		1.00			$       3.19