Reference: 08-09
Fletcher Company Has Three Products with the Following

question 110

Multiple Choice

Reference: 08-09
Fletcher Company has three products with the following characteristics: $$\begin{array} { | l | l | l | l | } \hline & \text { Product A } & \text { Product B } & \text { Product } \text { C } \\\hline \text { Monthly sales in dollars } & \$ 60,000 & \$ 80,000 & \$ 100,000 \\\hline \text { Contribution margin ratio } & 20 \% & 40 \% & 16 \% \\\hline\end{array}$$
-If total units sold remain unchanged, but the sales mix shifts more heavily toward Product C, one would expect the overall contribution margin ratio to:

• A)remain unchanged.
• B)decrease.
• C)increase.
• D)none of these.

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Definitions:

Partnership Business

An officially recognized form of enterprise undertaken by two or more participants, who equally manage the business and its profits.

Agent

A person authorized to act on behalf of another, often in business transactions.

Employee

An individual who provides labor or services to another person or business in exchange for compensation under agreed terms.

Vicariously Liable

A legal principle where one party is held responsible for the actions or omissions of another party, often used in employer-employee relations.