When an Organization Produces and Sells a Number of Different

question 117

True/False

When an organization produces and sells a number of different products or services, the weighted average contribution margin per unit is used to determine the breakeven point or target profit in units.

---

Definitions:

Cannibalization

A reduction in sales volume or market share of a company’s existing product due to the introduction of a new product made by the same company.

Product-line Extensions

The introduction of new products to an existing product line, usually related to the current products but targeted to meet different customer needs or preferences.

Sales of Existing

Transactions involving goods or assets that are not new but have been previously owned or used.

Product Line

A group of related products marketed by the same firm.