Popeye's, a local convenience store, sells soft drinks
It sells two large drinks for every small drink. A large drink sells for $3.00 with a variable cost of $0.80. A small drink sells for $1.00 with a variable cost of $0.50. The weighted average contribution margin is ________.
(Round any intermediate calculations and your final answer to the nearest cent.)
A) $1.35 per drink
B) $4.90 per drink
C) $1.63 per drink
D) $2.20 per drink
C)
Large drink Small drink
Sales price per unit $3.00 $1.00
Less variable cost per unit (0.80 ) (0.50 )
Contribution margin per unit 2.20 0.50
Number of units x 2 x 1
Weighted contribution margin $4.40 $0.50
Total weighted contribution = $4.40 + $0.50 = $4.90
Weights = 2 large drinks + 1 small drink = 3 drinks
Weighted-average contribution margin per unit = $4.90 / 3 drinks = $1.63 per drink
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Your sister turned 35 today, and she is planning to save $7,000 per year for retirement, with the first deposit to be made one year from today. She will invest in a mutual fund that's expected to provide a return of 7.5% per year. She plans to retire 30 years from today, when she turns 65, and she expects to live for 25 years after retirement, to age 90. Under these assumptions, how much can she spend each year after she retires? Her first withdrawal will be made at the end of her first retirement year.
A) $58,601 B) $61,686 C) $64,932 D) $68,179
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