In most multiproduct situations when sales mix shifts toward the product with the highest contribution margin, operating income will be higher.

Question

Quizplus · Accepted Answer

When sales mix shifts towards the product with the highest contribution margin, it means that a greater proportion of sales is being generated by the product that generates the most profit. This results in a higher overall contribution margin and, therefore, a higher operating income.

In Most Multiproduct Situations When Sales Mix Shifts Toward the Product