In multiproduct situations,when sales mix shifts toward the product with the highest contribution margin then:

Question

Quizplus · Accepted Answer

When the sales mix shifts towards the product with the highest contribution margin, the overall contribution margin will increase. This means that the product is generating more profit per unit sold, resulting in an increase in operating profit. There is no reason to believe that total revenues will necessarily decrease or that the break-even quantity will increase, and the total contribution margin will actually increase. Therefore, the best choice is B.

In Multiproduct Situations,when Sales Mix Shifts Toward the Product with the Highest