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 lower contribution ratio, which of the following is false? O a. the breakeven point will increase. b. operating income will increase. С. Fixed cost will be constant. d. all of the answers are true. e. the average contribution margin ratio will decrease.

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 lower contribution ratio, which of the following is false? O a. the breakeven point will increase. b. operating income will increase. С. Fixed cost will be constant. d. all of the answers are true. e. the average contribution margin ratio will decrease.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Time left 0:25
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 lower
contribution ratio, which of the following is false?
a.
the breakeven point will increase.
b. operating income will increase.
С.
Fixed cost will be constant.
d. all of the answers are true.
e.
the average contribution margin ratio will decrease.
On the cost-volume-profit graph, the area between the total cost line and the sales line before the break
even point represents:
a.
The variable cost amount
b.
The contribution margin per unit

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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 ? O a Fixed cost will be constant . . the breakeven point will decrease . Ocall of the answers are true . d the average contribution margin ratio will increase . O e operating income will increase