If the Sales Mix Shifts to Four Units of Product

question 166

Multiple Choice

If the sales mix shifts to four units of Product A and one unit of Product B,then the weighted-average contribution margin will ________.

• A) increase per unit
• B) stay the same
• C) decrease per unit
• D) either increase or stay the same

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Definitions:

Spin-Offs

Businesses or units that were once part of a larger company but have been separated to form a new independent entity.

Corporate Bonds

Debt securities issued by corporations to finance their operations, projects, or expansion, which pay interest to investors until maturity, at which point the principal amount is repaid.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable and inventories, and meeting other short-term liabilities.

Trade Credit

A type of commercial financing where a customer is allowed to purchase goods or services and pay the supplier at a later scheduled date.