A company that sells many different types of products should approach CVP analysis by assuming that

Question

Quizplus · Accepted Answer

When a company sells many different types of products, it's unlikely that all of them will have the same contribution margin ratio. Additionally, it's unlikely that the company will sell equal amounts of each product each period. Therefore, the company should approach CVP analysis by assuming that products will be sold in a constant mix, meaning that the sales mix will remain relatively constant over time. This allows the company to more accurately predict their overall contribution margin and break-even point.

A Company That Sells Many Different Types of Products Should