The weighted contribution is equal to which expression?

The weighted contribution is equal to which expression?

• A. Cm × costs
• B. Contribution Margin
• C. Cm × percent of sales
• D. Slack

Answer: (C)

Understanding how sales mix affects profitability, the weighted contribution uses the contribution margin per unit (Cm) and scales it by how much of total sales that item represents. By multiplying Cm by the percent of sales, you adjust the margin to reflect the item’s share of revenue, giving the portion of total contribution that the product line contributes. This is why the weighted contribution is expressed as Cm × percent of sales. The other options don’t account for how sales mix changes the overall contribution: a plain contribution margin ignores how much of total sales comes from that item, Cm × costs mixes the margin with costs in a nonsensical way, and slack is unrelated to contribution calculations.

Understanding how sales mix affects profitability, the weighted contribution uses the contribution margin per unit (Cm) and scales it by how much of total sales that item represents. By multiplying Cm by the percent of sales, you adjust the margin to reflect the item’s share of revenue, giving the portion of total contribution that the product line contributes. This is why the weighted contribution is expressed as Cm × percent of sales. The other options don’t account for how sales mix changes the overall contribution: a plain contribution margin ignores how much of total sales comes from that item, Cm × costs mixes the margin with costs in a nonsensical way, and slack is unrelated to contribution calculations.