Slamburger's sells three cheeseburgers for every two regular hamburgers

Accounting Feb 23, 2021

Slamburger's sells three cheeseburgers for every two regular hamburgers. A cheeseburger sells for $3.50 with a variable cost of $1.00. A regular hamburger sells for $3 with a variable cost of $0.75. What is the weighted average contribution margin?

A) $0.60

B) $2.40

C) $0.42

D) $4.20

Expert Solution

Answer: B

Explanation: B)

	Cheeseburger	Hamburger	Total
Sales	$3.50	$3.00
Variable Costs	1.00	0.75
Contribution Margin	$2.50	$2.25
× Sales Mix	3	2	5
Contribution margin	$7.50	$4.50	$12.00

Contribution Margin $12.00 / 5 Sales Mix = $2.40 Weighted CM

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