Crest Computing. Inc. sells three types of computing devices. Information on these is as follows: Based on this information, what is the weighted average contribution margin (WACM)?
A) $43.50
B) $44.50
C) $42.25
D) $43.75

Question

Crest Computing. Inc. sells three types of computing devices. Information on these is as follows:  Based on this information, what is the weighted average contribution margin (WACM)?
A) $43.50 
B) $44.50 
C) $42.25 
D) $43.75

Quizplus · Accepted Answer

The weighted average contribution margin (WACM) is calculated as: (UCM x Sales mix for laptop) + (UCM x Sales mix for tablet) + (UCM x Sales mix for desktop), thus ($40 x .25) + ($45 x .60) + ($35 x .15) = $10.00 + $27.00 + $5.25 = $42.25.