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:

Equilibrium Price

The price in the market where the amount of products offered matches the amount of products people want to buy.

Quantity Supplied

The amount of a good or service that producers are willing and able to sell at a particular price over a specified period.

Rent Controls

Government-imposed limits on the amount landlords can charge for leasing a home or apartment.

Economic Profit

The difference between the total revenue generated by a business and the total costs, including both explicit and implicit costs.