A shift in the sales mix from products with a low contribution margin ratio toward products with a high contribution margin ratio will lower the break-even point in the company as a whole.

Question

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The contribution margin ratio is the percentage of sales revenue that exceeds the variable costs of producing the product. If a company shifts its sales mix towards products with a high contribution margin ratio, it means that there will be a greater contribution margin available to cover the fixed costs and break-even point will be lowered.

A Shift in the Sales Mix from Products with a Low