Geneva Bottled Water Co

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 $3.69 while the sales price per unit of the 20 oz. bottled water is $1.08. The contribution margin per unit for the 36 oz. bottle is $2.40 and the contribution margin of the 20 oz. bottle is $0.12. 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) $3.00
B) $2.02
C) $0.50
D) $2.42

Correct Answer:

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