Question

Sheridan Company sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $45 and a selling price of $105. Q-Drive Plus has variable costs per unit of $60 and a selling price of $150. The weighted-average unit contribution margin for Sheridan is___________.

Answer 1

Answer:

weighted-average CM= $81

Explanation:

Giving the following information:

Sheridan Company sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $45 and a selling price of $105. Q-Drive Plus has variable costs per unit of $60 and a selling price of $150.

weighted-average CM= (weighted average selling price - weighted average variable expense)

weighted-average CM= (0.3*105 + 0.7*150) - (0.3*45 + 0.7*60)= $81