An important assumption in multiproduct CVP analysis is a constant sales mix.

Question

Quizplus · Accepted Answer

Multiproduct CVP analysis assumes that the sales mix of the various products remains constant, i.e., the proportion of each product sold within the total sales remains the same over the period of analysis. This is because the contribution margin of each product differs, and any changes in the sales mix can have a significant impact on the overall profitability of the company. Therefore, it is essential to assume a constant sales mix while performing multiproduct CVP analysis.

An Important Assumption in Multiproduct CVP Analysis Is a Constant