weighted average contribution margin

Dictionary of Accounting Terms for: weighted average contribution margin
weighted average contribution margin

one in which weights are relative to sales mix. For example, assume that Company Z has two products with the following contribution margin data:

A B
Unit CONTRIBUTION MARGIN (CM) $3 $5
Sales mix 60% 40%

The weighted average CM per unit is ($3)(0.6) + ($5)(0.4) = $3.80

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