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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%

    © BrainMass Inc. brainmass.com October 10, 2019, 2:36 am ad1c9bdddf
    https://brainmass.com/business/accounting/financial-analysis-contribution-margin-384853

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    Solution Summary

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

    $2.19