The contribution margin per unit is equal to $100 and the weighted average contribution margin per unit can be calculated by multiplying the contribution per unit by the sales mix percentage.
Contribution margin can be defined as a business' income sales much less its variable costs. The ensuing contribution dollars may be used to cover constant costs (along with rent), and as soon as the ones are covered, any extra is taken into consideration earnings.
As per the given information,
[tex]\rm\,Contribution\, margin\, per\, unit\, = Selling \,price \,per \,unit - Variable \,cost \,per \,unit[/tex]
[tex]\rm\,Contribution\, margin\, per\, unit\, = \$150 - \$50\\\\\rm\,Contribution\, margin\, per\, unit\, = \$100[/tex]
the weighted average contribution per unit= 100$ × the sales mix of that tyre.
hence, The contribution margin per unit is equal to $100 and the weighted average contribution margin per unit can be calculated by multiplying the contribution per unit by the sales mix percentage.
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