Question

​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 large fry sells for with a variable cost of What is the weighted average contribution​ margin?

Answer 1

Answer:

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

Explanation:

Sales proportion:

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.

We need to complete the information to calculate the weighted average contribution margin:

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

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

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