Answer the following questions using the information below:
The following information is for Barnett Corporation:

-If the sales mix shifts to one unit of Product X and two units of Product Y, then the weighted-average contribution margin will:
A)increase per unit
B)stay the same
C)decrease per unit
D)be indeterminable

Question

Answer the following questions using the information below:
The following information is for Barnett Corporation:
   
-If the sales mix shifts to one unit of Product X and two units of Product Y, then the weighted-average contribution margin will:
A)increase per unit 
B)stay the same 
C)decrease per unit 
D)be indeterminable

Quizplus · Accepted Answer

Since the contribution margin for Product X is $0.75 and for Product Y is $0.50, the weighted-average contribution margin will increase from $0.56 to $0.75 x 1 + $0.50 x 2 = $1.75. Therefore, the answer is A, increase per unit.

Answer the Following Questions Using the Information Below