McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2. Product A sells for $86; Z sells for $124. Vari
able costs for product A are $45; for Z $49. Fixed costs are $429,500. Compute the contribution margin per composite unit.
1 answer:
Answer:
the contribution margin per composite unit is $365
Step-by-step explanation:
The computation of the contribution margin per composite unit is shown below:
= Contribution margin per unit for product A × ratio of A + Contribution margin per unit for product B × ratio of B
= ($86 - $45) × 5 + ($124 - $49) × 2
= $205 + $160
= $365
Hence the contribution margin per composite unit is $365
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