Reference: 08-09
Fletcher Company has three products with the following characteristics: $$\begin{array} { | l | l | l | l | }
\hline & \text { Product A } & \text { Product B } & \text { Product } \text { C } \
\hline \text { Monthly sales in dollars } & \$ 60,000 & \$ 80,000 & \$ 100,000 \
\hline \text { Contribution margin ratio } & 20 \% & 40 \% & 16 \% \
\hline
\end{array}$$
-If total units sold remain unchanged, but the sales mix shifts more heavily toward Product C, one would expect the overall contribution margin ratio to:

Question

Reference: 08-09
Fletcher Company has three products with the following characteristics: $$\begin{array} { | l | l | l | l | } 
\hline & \text { Product A } & \text { Product B } & \text { Product } \text { C } \
\hline \text { Monthly sales in dollars } & \$ 60,000 & \$ 80,000 & \$ 100,000 \
\hline \text { Contribution margin ratio } & 20 \% & 40 \% & 16 \% \
\hline
\end{array}$$
-If total units sold remain unchanged, but the sales mix shifts more heavily toward Product C, one would expect the overall contribution margin ratio to:

Quizplus · Accepted Answer

The overall contribution margin ratio would decrease because Product C has the lowest contribution margin ratio among the three products. Shifting sales more heavily toward Product C would lower the average contribution margin ratio of the total sales mix.

Reference: 08-09 Fletcher Company Has Three Products with the Following

Reference: 08-09
Fletcher Company Has Three Products with the Following