Archoid's Flowering Plants provides the following information for the month of May: Actual Budget Tulips Geraniums Tulips Geraniums Sales in units 4,420 4,080 4,950 3,300 Contribution margin per unit $12 $19 $11 $21 What is the budgeted contribution margin per composite unit for the budgeted mix?

Contribution margin = $15

Explanation:

Giving the following information:

Sales May in units:

Budget:

Tulips = 4,950

Geraniums = 3,300

Actual:

Tulips = 4,420

Geraniums = 4,080

Contribution margin:

Budget:

Tulips = $11

Geraniums = $21

Actual:

Tulips = $12

Geraniums = $19

We need to calculate the budgeted contribution margin per composite unit.

First, we need to calculate the percentage of sales for each plant.

Total units = 8250 units

Tulips = 4950/8250 = 0.6

Geranius = 3300/8250 = 0.4

Contribution margin = (0.6*11) + (0.4*21) = $15