The following data concern two products sold by Redding Corporation.
-If the sales mix shifts toward Product X, and product contribution margin ratios remain unchanged, one would expect the break-even point for the company as a whole to:

Question

The following data concern two products sold by Redding Corporation. 
-If the sales mix shifts toward Product X, and product contribution margin ratios remain unchanged, one would expect the break-even point for the company as a whole to:

Quizplus · Accepted Answer

If the sales mix shifts towards Product X, which has a higher contribution margin ratio, it means that each unit of Product X sold will contribute more towards covering the fixed costs. Therefore, the break-even point for the company as a whole will decrease as fewer units of both products need to be sold to cover the fixed costs.

The Following Data Concern Two Products Sold by Redding Corporation