contestada

Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows:

Product Unit Selling Price Unit Variable Cost Unit Contribution Margin

X $110 $70 $40

Y 70 50 20

Required:

1. For break-even analysis, the unit contribution margin of E was ___________

a.$60.00

b.$22.50

c.$20.00

d.$40.00

Respuesta :

facundobuzzetti

Answer:

Weighted average contribution margin= $22.5

Explanation:

Giving the following information:

Rusty sold:

5,000 units of X

35,000 units of Y

Contribution Margin:

X= $40

Y= $20

We need to find the unitary contribution margin of the company as a whole.

First, we need to determine the participation of the sales for each product.

X= 5,000/40,000= 0.125

Y=35,000/40,000= 0.875

Now, we need to use the following formula:

Weighted average contribution margin = unitary contribution margin*sales participation

Weighted average contribution margin= (0.125*40) + (0.875*20)

Weighted average contribution margin= $22.5

Otras preguntas