The Following Data Concern Two Products Sold by Redding Corporation

question 104

Multiple Choice

The following data concern two products sold by Redding Corporation.
-If the sales mix shifts toward Product X, and product contribution margin ratios remain unchanged, one would expect the break-even point for the company as a whole to:

• A) increase.
• B) decrease.
• C) remain unchanged.
• D) it is impossible to determine.

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Definitions:

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost, reflecting changes in material prices.

Materials Quantity Variance

The difference between the expected amount of materials needed for production and the actual amount used.

Materials Price Variance

The difference between the actual cost of materials used in production and the expected (or budgeted) cost.

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the standard amount expected to be used, multiplied by the standard cost per unit.