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Monica [59]
3 years ago
10

​Sally's Fries sells five large fries for every four small ones. A small fry sells for $2.00 with a variable cost of $0.25 . A l

arge fry sells for with a variable cost of What is the weighted average contribution​ margin?
Business
1 answer:
Greeley [361]3 years ago
6 0

Answer:

Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)

Explanation:

S<u>ales proportion:</u>

Large fries= 5/9= 0.56

Small fries= 4/9= 0.44

A small fry sells for $2.00 with a variable cost of $0.25.

<u>We need to complete the information to calculate the weighted average contribution margin:</u>

For example= A large fry sells for $2.9 with a variable cost of $0.4

<u>To calculate the weighted-average contribution margin, we need to use the following formula:</u>

<u></u>

Weighted average contribution margin= (weighted average selling price - weighted average unitary variable cost)

Weighted average contribution margin= (0.56*2.9 + 0.44*2) - (0.56*0.4 + 0.44*0.25)

Weighted average contribution margin= 2.504 - 0.334

Weighted average contribution margin= $2.17

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