Mist Company Sells Two Products-A and B

question 157

Multiple Choice

Mist Company sells two products-A and B. Mist predicts that it will sell 2,500 units of A and 1,500 units of B during the next period. The unit contribution margins are $3.50 and $4.80, respectively. What is the weighted-average unit contribution margin? (Please round to nearest cent.)

• A) $3.99
• B) $4.25
• C) $4.15
• D) $3.71

---

Definitions:

MC Curve

A graphical representation of how the cost to produce one additional unit (marginal cost) changes as production increases.

AVC Curve

The Average Variable Cost curve, which shows the variable cost per unit at different levels of output.

Loss

A financial situation where expenses exceed revenues, or when an investment's value decreases compared to its purchase price.

Price

The monetary value assigned to a product or service, determined by various factors including supply, demand, and production costs.