Geneva Bottled Water Co

question 100

Multiple Choice

Geneva Bottled Water Co.is assembling a weighted average contribution margin chart to better analyze differences between sales on 36 oz.and the 20 oz.bottled water.The sales price per unit of the 36 oz.bottled water is $3.79 while the sales price per unit of the 20 oz.bottled water is $1.19.The contribution margin per unit for the 36 oz.bottle is $1.35 and the contribution margin of the 20 oz.bottle is $0.28.The 20 oz.bottle outsells the 36 oz.bottle by a 5:1 relationship.
What is the weighted average contribution margin per unit on these two products?

• A)$2.75
• B)$1.30
• C)$0.46
• D)$1.45

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Definitions:

Acquisition Cost

Refers to all of the costs involved in acquiring a new asset or company, including the purchase price and all associated expenses.

Deferred Ordinary Annuity

An annuity contract that begins payments at a specified future date, as opposed to immediately after the initial investment.

Present Value

The value today of a future sum of money or sequence of cash inflows, factoring in a given return rate.

Compounded Annually

This describes the process where interest is added to the principal balance of an investment or loan once per year, resulting in interest earning interest in subsequent years.