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.
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 determining the optimal mix of products to sell in order to maximize profits. Variable costing focuses on the contribution margin, which is the difference between sales revenue and variable expenses. By emphasizing products with a higher contribution margin, businesses can increase their overall profitability. Fixed costs are not relevant in sales mix decisions since they are not affected by changes in the mix of products sold.

Which Is the Following Is the Most Appropriate Reason That