Which is the following is the most appropriate reason that sales mix decisions should be made using variable costing?
A)All costs,including fixed costs,are controllable by upper management in the long run.
B)To increase profits,businesses should emphasize the products with the highest contribution margin per unit.
C)Sales mix decisions primarily focus on fixed costs.
D)Fixed costs do not affect the operating income in the long run.

Question

Quizplus · Accepted Answer

Sales mix decisions involve selecting the mix of products that will maximize profits. Variable costing allows management to focus on the contribution margin per unit, which is important for determining the profitability of each product. Since fixed costs are not allocated to individual products under variable costing, it allows for better analysis of the impact of different sales mixes on profitability.

Which Is the Following Is the Most Appropriate Reason That