CVP analysis for companies that sell more than one product assumes that the contribution margin ratio for all products is the same.

Question

Quizplus · Accepted Answer

CVP analysis assumes that the contribution margin ratio for each product is consistent and does not necessarily have to be the same for all products. Each product's contribution margin ratio can be calculated separately and should be taken into account when performing CVP analysis for companies that sell multiple products.

CVP Analysis for Companies That Sell More Than One Product