CVP analysis with multiple products assumes that sales will continue at the same mix of products, expressed in either sales units or sales dollars. This assumption is essential, because a change in the product mix will probably change:

Question

Quizplus · Accepted Answer

The weighted-average contribution margin (per unit or ratio) will change because different products have different contribution margins. Therefore, a change in the product mix will alter the overall weighted-average contribution margin. Other options may also change, but the change in the product mix has the most significant impact on the weighted-average contribution margin.

CVP Analysis with Multiple Products Assumes That Sales Will Continue