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6 January, 23:09

The Doughboys Pizza Company sells pizzas in two different sizes long dash - medium and large. The two products sell in equal numbers. The contribution margin of a medium pizza is $16, and the contribution margin of a large pizza is $18. The weighted average contribution margin is $17.

True or False

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Answers (1)
  1. 7 January, 00:37
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    True

    Explanation:

    As we know

    Contribution margin per unit = Selling price per unit - Variable expense per unit

    The computation of the weighted average contribution margin is shown below:

    = Contribution margin of a medium pizza * equal percentage + contribution margin of a large pizza * equal percentage

    = $16 * 50% + $18 * 50%

    = $8 + $9

    = $17

    So the given statement is true
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