The Local Convenience Store Sells Soft Drinks

question 61

Multiple Choice

The local convenience store sells soft drinks. It sells two large drinks for every small drink. A large drink sells for $1.50, with a variable cost of $0.60. A small drink sells for $1.00 with a variable cost of $0.50. What is the weighted- average contribution margin? (Please round to the nearest cent.)

• A)$0.65
• B)$0.70
• C)$0.45
• D)$0.77

---

Definitions:

Direct Labor-Hours

The cumulative hours that employees engaged in the creation of products or services dedicate to their work.

Job-Order Costing

An accounting method used to track the costs associated with each unique job or order, suitable for customized or non-repetitive products.

Direct Labor Cost

The wages and other costs for labor that is directly involved in the production of goods.

Manufacturing Overhead

All manufacturing costs except direct labor and direct materials, including maintenance and utilities.