Which of the Following Is a TRUE Statement About Sales

question 44

Multiple Choice

Which of the following is a TRUE statement about sales mix?

• A)Profits may decline with an increase in total monetary sales if the sales mix shifts to sell more of the high contribution margin product.
• B)Profits may decline with an increase in total monetary sales if the sales mix shifts to sell more of the lower contribution margin product.
• C)Profits will remain constant with an increase in total monetary sales if the total sales in units remains constant.
• D)Profits will remain constant with a decrease in total monetary sales if the sales mix also remains constant.

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Definitions:

Residual Value

The estimated value of an asset at the end of its useful life, important in calculating depreciation and lease contracts.

Estimated Useful Life

The anticipated period over which an asset is expected to be used before it is fully depreciated.

Units-of-production

A method of depreciation based on an asset's usage, activity, or parts produced rather than passing time.

Depreciation Expense

The systematic allocation of the cost of a tangible asset over its useful life, reflecting wear and tear or obsolescence.