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4 December, 01:22

Swifty Corporation has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Swifty incurs $7192800 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Sports Gear it is 50%. The weighted-average contribution margin ratio is

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  1. 4 December, 03:45
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    37.00%

    Explanation:

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

    Particulars Sporting Goods Sports Gear Total

    Contribution Margin Ratio 30% 50%

    Sales Mix - Weights 65% 35%

    Weighted Contribution Margin 19.50% 17.50% 37.00%

    We simply multiplied the contribution margin ratio with the sales mix weighted so that the weighted contribution margin ratio could come
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