Becky's Bakery sells three large muffins for every two small ones
A small muffin sells for $3.50 with a variable cost of $2.00. A large muffin sells for $6.00 with a variable cost of $3.00. What is the weighted-average contribution margin? (Round any intermediate calculations and your final answer to the nearest cent.)
A) $4.75 per muffin
B) $2.25 per muffin
C) $4.50 per muffin
D) $2.40 per muffin
D .D)
Large Small
muffin muffin
Sales price per unit $6.00 $3.50
Less variable cost per unit (3.00 ) (2.00 )
Contribution margin per unit $3.00 $1.50
Number of units x 3 x 2
Weighted contribution margin $9.00 $3.00
Total weighted contribution = $9.00 + $3.00 = $12.00
Weights = 3 large muffins + 2 small muffins = 5 muffins
Weighted-average contribution margin per unit = $12.00 / 5 muffins = $2.40 per muffin
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