If Conan Corporation sells two products with a sales mix of 75%-25%, and the respective contribution margins are $100 and $300, then weighted-average unit contribution margin is $150.

Question

Quizplus · Accepted Answer

To calculate the weighted-average unit contribution margin, we can use the formula:

Weighted-average unit contribution margin = (Contribution margin of Product 1 x Sales mix of Product 1) + (Contribution margin of Product 2 x Sales mix of Product 2)

Plugging in the given numbers, we get:

Weighted-average unit contribution margin = ($100 x 0.75) + ($300 x 0.25) = $75 + $75 = $150

Therefore, the statement is true.

If Conan Corporation Sells Two Products with a Sales Mix