In multiproduct situations when sales mix shifts toward the product with the lowest contribution margin, the breakeven quantity will decrease.

Question

Quizplus · Accepted Answer

When the sales mix shifts toward the product with the lowest contribution margin, it means that the overall contribution margin per unit decreases. This, in turn, increases the breakeven quantity because more units need to be sold to cover the fixed costs. Therefore, the statement is false.

In Multiproduct Situations When Sales Mix Shifts Toward the Product