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Financial Analysis

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1. Calculate the contribution margin rate for each product.

2. Calculate the weighted average contribution margin (WACM) rate for all five products.

Target Profit is $35,000

Product Retail Selling Price/yard Wholesale Selling Price/yard Variable Cost/yard Expected Sales Breakdown ($)
Green $18.00 $13.00 $11.00 10%
Blue $12.50 $10.00 $4.00 5%
Yellow $19.00 $12.00 $8.50 40%
Black $22.00 $17.00 $11.75 10%
Red $32.00 $27.00 $18.00 35%

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Solution Summary

The expert calculates the contribution margin rate for each product. The weighted average contribution margin is determined.

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