Assume that the company sells two products,X and Y,with contribution margins per unit of $12 and $10,respectively.What happens to the break-even point if the sales mix shifts to favor product X? (In other words,sales of product X will make up a higher percentage of the sales mix.)
A) Break-even point increases.
B) Break-even point decreases.
C) Break-even point stays the same.
D) None of these answers is correct.

Question

Quizplus · Accepted Answer

The break-even point decreases because the contribution margin per unit of product X is higher than that of product Y. As product X makes up a higher percentage of the sales mix, the overall contribution margin per unit also increases, leading to a lower break-even point.

Assume That the Company Sells Two Products,X and Y,with Contribution