Each of a Company's Several Product Lines Has a Different

question 34

Multiple Choice

Each of a company's several product lines has a different contribution margin ratio. Total sales in 2014 were 20% higher than total sales in 2013. Total contribution margin for 2014 will be:

• A) the same as it was in 2013, regardless of changes in sales mix.
• B) 20% higher than it was in 2013, regardless of changes in sales mix.
• C) more than 20% higher than it was in 2013, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2014 than in 2013.
• D) less than 20% higher than it was in 2013, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2014 than in 2013.

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Definitions:

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity demanded.

Complements

Goods that are often used together, where an increase in demand for one leads to an increase in demand for the other.

Shift In The Demand Curve

A change in the demand for a product or service, resulting from factors like changes in income, preferences, or prices of other goods.

Movement Along The Demand Curve

A change in the quantity demanded of a good due to a price change, holding all other factors constant.