Oriole Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candles 30%, standard tapered candles 60%, and large scented candles 10%. The contribution margin ratio of each candle type is shown below. Candle Type Birthday Standard tapered Large scented (a) Contribution Margin Ratio 20% 30% 40% What is the weighted average contribution margin ratio? Weighted average contribution margin ratio
Oriole Candle Supply makes candles. The sales mix (as a percentage of total dollar sales) of its three product lines is birthday candles 30%, standard tapered candles 60%, and large scented candles 10%. The contribution margin ratio of each candle type is shown below. Candle Type Birthday Standard tapered Large scented (a) Contribution Margin Ratio 20% 30% 40% What is the weighted average contribution margin ratio? Weighted average contribution margin ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please provide answer in text (Without image)
![**Oriole Candle Supply Contribution Margin Analysis**
Oriole Candle Supply produces three types of candles. The sales mix (as a percentage of total dollar sales) for these products is comprised of:
- Birthday candles: 30%
- Standard tapered candles: 60%
- Large scented candles: 10%
The contribution margin ratio for each type of candle is outlined below:
- **Candle Type and Contribution Margin Ratio:**
- Birthday: 20%
- Standard tapered: 30%
- Large scented: 40%
**Question (a):**
*What is the weighted-average contribution margin ratio?*
The formula to calculate the weighted-average contribution margin ratio is:
\[ \text{Weighted-average contribution margin ratio} = \left(\frac{\text{Product 1 sales percentage} \times \text{Product 1 contribution margin} + \text{Product 2 sales percentage} \times \text{Product 2 contribution margin} + \text{Product 3 sales percentage} \times \text{Product 3 contribution margin}}{100}\right) \]
Calculate the weighted-average contribution margin ratio and enter the result in the provided box.
___
This is an example of analyzing financial metrics to understand product profitability and sales performance in a business setting.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff4f4865a-ef7d-48b6-9e5b-0e85084b2d7c%2F66385c47-73ec-4f95-9e5e-16e007424195%2Fprxgme5_processed.jpeg&w=3840&q=75)
Transcribed Image Text:**Oriole Candle Supply Contribution Margin Analysis**
Oriole Candle Supply produces three types of candles. The sales mix (as a percentage of total dollar sales) for these products is comprised of:
- Birthday candles: 30%
- Standard tapered candles: 60%
- Large scented candles: 10%
The contribution margin ratio for each type of candle is outlined below:
- **Candle Type and Contribution Margin Ratio:**
- Birthday: 20%
- Standard tapered: 30%
- Large scented: 40%
**Question (a):**
*What is the weighted-average contribution margin ratio?*
The formula to calculate the weighted-average contribution margin ratio is:
\[ \text{Weighted-average contribution margin ratio} = \left(\frac{\text{Product 1 sales percentage} \times \text{Product 1 contribution margin} + \text{Product 2 sales percentage} \times \text{Product 2 contribution margin} + \text{Product 3 sales percentage} \times \text{Product 3 contribution margin}}{100}\right) \]
Calculate the weighted-average contribution margin ratio and enter the result in the provided box.
___
This is an example of analyzing financial metrics to understand product profitability and sales performance in a business setting.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education