Colossal Beverages Company Sells Two Products,A and B

question 244

Multiple Choice

Colossal Beverages Company sells two products,A and B.Mist predicts that it will sell 2500 units of A and 2000 units of B during the next period.The unit contribution margins are $4.00 and $4.80 for products A and B,respectively.What is the weighted-average unit contribution margin? (Round your answer to the nearest cent.)

• A) $4.36
• B) $4.40
• C) $4.44
• D) $8.80

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Definitions:

Direct Write Off Method

An accounting method where uncollectible accounts receivable are written off directly against income at the time they are deemed uncollectible.

Bad Debts Expense

An estimated expense that represents the cost of accounts receivable that a company does not expect to collect.

Allowance for Doubtful Accounts

An estimation of the accounts receivable that a company does not expect to collect.

Percentage of Receivables

An accounting method used to estimate the value of a company's bad debts based on a percentage of the accounts receivable.