Smith Company is conducting a sales mix analysis.The first step in this analysis involves which of the following formulas?
A)Contribution Margin per Unit = Selling Price per Unit - Variable Costs per Unit
B)Contribution Margin per Unit = Selling Price per Unit - Fixed Costs per Unit
C)Contribution Margin per Unit of Constrained Resources = Contribution Margin per Unit ¸ Quantity of the Constrained Resource Required per Unit
D)Contribution Margin per Unit of Constrained Resources = Contribution Margin per Unit ´ Quantity of the Constrained Resource Required per Unit

Question

Quizplus · Accepted Answer

The first step in a sales mix analysis involves calculating the contribution margin per unit, which is calculated as the selling price per unit minus the variable costs per unit. This formula helps determine the profitability of each product or service, and allows the company to determine the optimal sales mix for maximum profitability. Therefore, the correct answer is A.

Smith Company Is Conducting a Sales Mix Analysis