Question
A firm sells three products. Product 1: $16 sales price per unit; $10 variable cost per unit. Product 2: $14 sales price per unit; $6
A firm sells three products.
Product 1: $16 sales price per unit; $10 variable cost per unit. Product 2: $14 sales price per unit; $6 variable cost per unit. Product 3: $24 sales price per unit; $16 variable cost per unit.
In a typical year, 25% of sales units are Product 1, while 25% of sales units Product 2, and 50% of sales units are Product 3.
What is the firm's composite unit CM (just contribution margin for one composite unit)?
Simplify the sales mix so there is one unit of Product 1 per composite unit.
Round your final answer to the nearest whole dollar.
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