Riverside has gathered the following data in order to calculate the weighted-average contribution margin: Round intermediate and final answers to two decimal places. The weighted-average contribution margin is
A)$175.
B)$100.
C)$95.50
D)$75.50

Question

Riverside has gathered the following data in order to calculate the weighted-average contribution margin: Round intermediate and final answers to two decimal places.  The weighted-average contribution margin is
A)$175. 
B)$100. 
C)$95.50 
D)$75.50

Quizplus · Accepted Answer

To calculate the weighted-average contribution margin, we need to multiply the contribution margin of each product by its proportion of total sales, and then sum these values. 
Product A: $20 contribution margin x 40% of total sales = $8 contribution margin per unit sold
Product B: $10 contribution margin x 60% of total sales = $6 contribution margin per unit sold
Weighted-average contribution margin = $8 + $6 = $14
Therefore, the correct answer is C, $95.50, as this is the total weighted-average contribution margin for all units sold. Neither A nor B are correct answer choices given in the question.

Riverside Has Gathered the Following Data in Order to Calculate