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

question 28

Multiple Choice

Each of a company's several product lines has a different contribution margin ratio. Total sales in 2017 were 20% higher than total sales in 2016. Total contribution margin for 2017 will be:

• A) the same as it was in 2016, regardless of changes in sales mix.
• B) 20% higher than it was in 2016, regardless of changes in sales mix.
• C) more than 20% higher than it was in 2016, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2017 than in 2016.
• D)less than 20% higher than it was in 2016, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2017 than in 2016.

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Definitions:

Including Tax

Means that the price mentioned for goods or services includes any taxes that are applicable.

Gallon

A unit of volume measurement in the US customary units and the British imperial system, usually used for liquids.

Gas

A state of matter consisting of particles that have neither a defined volume nor a defined shape, often used as a fuel for heating, cooking, and electricity generation, among other applications.

Discount

A reduction in the price of goods or services, often used as a strategy to increase sales or clear inventory.