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    Weighted-Average Contribution Margin and Break-even

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    Jamal & Co. makes and sells two types of shoes, Plain and Fancy, Data concerning these products are a follows:
    Plain Fancy

    Unit selling price $20.00 $35.00
    Variable cost per unit 12.00 24.50

    Sixty percent of the unit sales are Plain, and annual fixed expenses are $ 45,000.

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    Solution Preview

    1) The weighted-average unit contribution margin is?

    Weighted-average contribution margin = (contribution margin of Plain*portion of sales of Plain) + (contribution margin of Fancy* portion of sales of Fancy)
    Weighted-average contribution margin = ...

    Solution Summary

    This solution illustrates how to compute the weighted-average contribution margin and weighted-average break-even point.

    $2.49

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