Question: 1. Explain the difference between the contribution margin per unit and the contribution margin ratio? 2. In all respects, Company A and Company B are

1. Explain the difference between the contribution margin per unit and the contribution margin ratio?

2. In all respects, Company A and Company B are identical except that Company As costs most variable, whereas Company Bs costs are mostly fixed. When sales increase, which company will tend to realize the greatest increase in profits? Why?

3. What is meant by the term sales mix? What assumption is usually made concerning sales mix in CVP analysis?

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