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WEIGHTED AVERAGE CONTRIBUTION MARGIN

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one in which weights are relative to sales mix. For example, assume that Company Z has two products with the following contribution margin data:


                                                                        A                      B
Unit CONTRIBUTION MARGIN (CM)                   $3                     $5
Sales mix                                                         60%                40%


The weighted average CM per unit is ($3)(0.6) + ($5)(0.4) = $3.80