Solved

Fletcher Company Has Three Products with the Following Characteristics Fixed Costs = $30,000 Per Month

Question 100

Multiple Choice

Fletcher Company has three products with the following characteristics:
 Product A  Product B  Product C  Monthly sales in  dollars $60,000$80,000$100,000 Contribution margin  ratio 20%40%16%\begin{array} { | l | r | r | r | } \hline & \text { Product A } & \text { Product B } & \text { Product C } \\\hline \begin{array} { l } \text { Monthly sales in } \\\text { dollars }\end{array} & \$ 60,000 & \$ 80,000 & \$ 100,000 \\\hline \begin{array} { l } \text { Contribution margin } \\\text { ratio }\end{array} & 20 \% & 40 \% & 16 \% \\\hline\end{array} Fixed Costs = $30,000 per month.


-If total units sold remain unchanged,but the sales mix shifts more heavily toward Product C,what would the overall contribution margin ratio be expected to do?


A) Increase.
B) Decrease.
C) Remain unchanged.
D) The effect cannot be predicted without additional information.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents