Ramirez Corporation sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $90 and a selling price of $150. Q-Drive Plus has variable costs per unit of $105 and a selling price of $195. The weighted-average unit contribution margin for Ramirez is
A) $69.
B) $75.
C) $81.
D) $150.

Question

Quizplus · Accepted Answer

The weighted-average unit contribution margin is calculated by multiplying each product's contribution margin by its sales mix percentage and summing the results. For Q-Drive: ($150 - $90) * 30% = $18. For Q-Drive Plus: ($195 - $105) * 70% = $63. Adding these gives $18 + $63 = $81.

Ramirez Corporation Sells Two Types of Computer Hard Drives