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Barkley Company sells two? products, red cups and black mugs. Barkley predicts that it will sell 2,600...

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Accounting

Barkley Company sells two? products, red cups and black mugs.Barkley predicts that it will sell

2,600 red cups and 700black mugs in the next period. The unitcontribution margins for red cups and black mugs are

$ 3.00 and $ 3.90 respectively. What is the weighted averageunit contribution? margin? (Round the final answer to the nearest?cent.)

A.$ 11.14

B.$ 4.05

C.$ 0.83

D.$ 3.19

Answer & Explanation Solved by verified expert
4.4 Ratings (785 Votes)

D.$ 3.19

Working:

Step-1;Calculation of Weight of Each Product
Product Units sold Weight
a b=a/3300
Red Cups         2,600           0.79
Black Mugs            700           0.21
Total         3,300           1.00
Step-2:Calculation of weighted Average Contribution
Product Weight Contribution Weighted Average Contribution
a b a*b
Red Cups           0.79 $       3.00 $       2.36
Black Mugs           0.21 $       3.90 $       0.83
Total           1.00 $       3.19

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