The company's weighted-average unit contribution margin is: $4.78.
The weighted average approach is most frequently used when inventory items are so entangled that it is challenging to allocate a specific cost to an individual unit. It is mostly used to assign the average cost of production to a certain product. When two identical inventory items are involved, this is typically the case. Additionally, this approach presupposes that a store sells all of its stock at once.
The price of the goods that are for sale is divided by the quantity of those units that are still on the shelf to create the weighted average model. The weighted average cost per unit that results from this computation can then be used to determine the cost of terminating inventory and the cost of goods sold.
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