Answer:
Weighted average contribution margin= $1.85
Explanation:
Giving the following information:
It sells two large drinks for every small drink. A large drink sells for $3.00 with a variable cost of $ 0.60. A small drink sells for $ 1.25 with a variable cost of $ 0.50.
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)
Sales proportion:
Large drink= 0.67
Small drink= 0.33
Weighted average contribution margin= (0.67*3 + 0.33*1.25) - (0.67*0.6 + 0.33*0.5)
Weighted average contribution margin= 2.4225 - 0.567
Weighted average contribution margin= $1.85
