Helpful hardware sells windows (80% of sales) and doors (20% of sales). the selling price of each window is $580 and of each door is $1,180. the variable cost of each window is $385 and of each door is $880. fixed costs are $1,737,720. the weighted-average contribution margin is:

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06-04-2022
Business

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Helpful hardware sells windows (80% of sales) and doors (20% of sales). the selling price of each window is $580 and of each door is $1,180. the variable cost of each window is $385 and of each door is $880. fixed costs are $1,737,720. the weighted-average contribution margin is:

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amcool amcool · Answer 1 · 2022-04-20T06:00:34-04:00

The weighted-average contribution margin of Helpful hardware which sells windows and doors is $216.

Calculation of Weighted-Average Contribution Margin

The weighted-average contribution margin can be calculated using the following formula:

Weighted-average contribution margin = (Contribution margin of windows * Percentage sales contribution of windows) + (Contribution margin of doors * Percentage sales contribution of doors) ……….. (1)

Where:

Contribution margin of windows = Selling price of each window - Variable cost of each window = $580 - $385 = $195

Percentage sales contribution of windows = 80%

Contribution margin of doors = Selling price of each door - Variable cost of each door = $1,180 - $880 = $300

Percentage sales contribution of doors = 20%

Substituting all the values into equation (1), we have:

Weighted-average contribution margin = ($195 * 80%) + ($300 * 20%) = $216

Therefore, the weighted-average contribution margin is $216.

Learn more about weighted-average contribution margin here: https://brainly.com/question/17054087.

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Calculation of Weighted-Average Contribution Margin

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