CVP Analysis with Multiple Products Assumes That Sales Will Continue

question 67

Multiple Choice

CVP analysis with multiple products assumes that sales will continue at the same mix of products, expressed in either sales units or sales dollars. This assumption is essential, because a change in the product mix will probably change:

• A) The average sales price per unit.
• B) The average variable cost per unit.
• C) The weighted-average contribution margin (per unit or ratio).
• D) The total fixed cost.
• E) The average contribution margin (per unit or ratio).

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Definitions:

Antitrust Policy

The use of the antitrust laws to promote competition and economic efficiency.

Social Regulation

Laws and regulations aimed at improving health, safety, and well-being in society, often implemented to correct market failures affecting the public interest.

Marginal Benefit

The additional satisfaction or value a consumer gains from consuming one more unit of a good or service.

Marginal Cost

The increase in cost that arises from an additional unit of production.