Managerial Accounting (15th Edition)

Published by McGraw-Hill Education
ISBN 10: 007802563X
ISBN 13: 978-0-07802-563-1

Chapter 5 - Cost-Volume-Profit Relationships - Questions - Page 215: 5-9

Answer

A shift in the sales mix could result in both a higher break-even point and a lower net income if the sales mix shifted from high contribution margin products to low contribution margin products. Then it would cause the average contribution margin ratio in the company to decline, resulting in a lesser total contribution margin.

Work Step by Step

--
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.