Barkley Company sells two products, red cups and black mugs. Barkley predicts that it will sell 2,500 red cups and 1,000 black mugs in the next period. The unit contribution margins for red cups and black mugs are $2.80 and $3.50, respectively

What is the weighted average unit contribution margin?
A) $2.33
B) $7.00
C) $3.00
D) $1.00

C
Explanation: C)
RED BLACK TOTAL
Contribution Margin $2.80 $3.50
× Sales Mix 2,500 1,000 3,500
Contribution margin $7,000 $3,500 $10,500

Contribution Margin $10,500 / 3,500 Sales Mix = $3.00 Weighted CM