Answer :
Answer:
0.1333
Explanation:
Given that,
Selling price = $5
Variable cost = $3
Annual sales = $20,000
Total sales = $60,000
Contribution margin:
= Selling price - Variable cost
= $5 - $3
= $2
Number of units sold:
= Annual sales ÷ Selling price
= $20,000 ÷ $5
= 4,000 units
Total contribution sales:
= Number of units sold × Contribution margin per unit
= 4,000 units × $2
= $8,000
Weighted contribution:
= Total contribution sales ÷ Total sales
= $8,000 ÷ $60,000
= 0.1333
The weighted average contribution margin is termed as the amount that is derived by the products and services at the fixed cost of the business. This is the base concept of the breakeven analysis.
The weighted contribution of this product is 0.1333
The Given information are:
Selling price = $5
Variable cost = $3
Annual sales = $20,000
Total sales = $60,000
Contribution margin = Selling price - Variable cost
= $5 - $3
= $2
Number of units sold = [tex]\frac{\text{Annual sales}}{\text{Selling price}}[/tex]
= [tex]\frac{\$20,000 }{\$5}[/tex]
= 4,000 units
Total contribution sales = [tex]\text{Number of units sold} \times \text{Contribution margin per unit}= 4,000 units \times \$2= $8,000[/tex]
Weighted contribution = [tex]\frac{\text{Total contribution sales}}{\text{Total sales}} = \frac{$8,000}{$60,000} = 0.1333[/tex]
To know more about the weighted contribution of this product, refer to the link below:
https://brainly.com/question/13125265