Each of a company's two product lines has a different contribution margin ratio. If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio, which of the following is true? a. the breakeven point will decrease. O b. operating income will increase. O c. the average contribution margin ratio will increase. d. Fixed cost will be constant. O e. all of the answers are true.
Each of a company's two product lines has a different contribution margin ratio. If the company's total sales remain the same but the sales mix shifts toward selling more of the product with the higher contribution ratio, which of the following is true? a. the breakeven point will decrease. O b. operating income will increase. O c. the average contribution margin ratio will increase. d. Fixed cost will be constant. O e. all of the answers are true.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Each of a company's two product lines has a different contribution margin ratio. If the company's
total sales remain the same but the sales mix shifts toward selling more of the product with the
higher contribution ratio, which of the following is true?
a. the breakeven point will decrease.
b. operating income will increase.
C. the average contribution margin ratio will increase.
d. Fixed cost will be constant.
O e.
all of the answers are true.
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