A multiproduct company has a sales mix of nine widgees to three squigees. Widgees have a contribution

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A multiproduct company has a sales mix of nine widgees to three squigees. Widgees have a contribution margin ratio of 45 percent, and squigees have a contribution margin ratio of 80 percent. If the sales mix changes to six widgees to six squigees, will the company have a higher or lower weighted average contribution margin ratio and a higher or lower break-even point (in sales dollars)? Explain the rationale for your answer.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Cost Accounting Foundations and Evolutions

ISBN: 978-1111626822

8th Edition

Authors: Michael R. Kinney, Cecily A. Raiborn

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