A Shift in the Sales Mix from Products with High

question 359

True/False

A shift in the sales mix from products with high contribution margin ratios toward products with low contribution margin ratios will raise the break-even point for the company as a whole.

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Definitions:

Selling and Administrative Expense

The aggregate of all indirect costs associated with the selling of products and the general operations of a business.

Direct Materials

Raw materials that can be physically and directly associated with the manufacturing of finished goods.

Depreciation

The method of allocating the cost of a tangible asset over its useful life.

Office Equipment

Tangible assets used in an office such as computers, printers, and desks, essential for day-to-day operations.