Papa's Pastries sells regular donuts and large donuts. For every six regular donuts sold the manager at Papa's Pastries sell four large donuts
Regular
Donuts Large
Donuts Total
Sales price per unit $15 $20
Less: Variable cost per unit $5 $9
Contribution margin $10 $11
Sales mix × 6 × 4 10
Weighted-average contribution margin per unit:
Calculate the weighted average contribution margin per unit.
Weighted average contribution margin per unit:
Regular donuts: $10 × 6 = $60
Large donuts: $11 × 4 = $44
$60 + $44 = $104
$104/10 = $10.40 weighted average contribution margin per unit.
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