The Frances Manufacturing Company sells two products, FRN and CES. FRN has a higher contribution margin ratio than CES. If the product mix shifts towards CES, the company's break-even point in total units (i.e., FRN plus CES) will increase.

Question

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If the product mix shifts towards CES, which has a lower contribution margin ratio, the overall contribution margin ratio decreases, leading to an increase in the break-even point in total units.

The Frances Manufacturing Company Sells Two Products, FRN and CES