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

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