Nesto Sells Two Products: X and Y

question 96

Multiple Choice

Nesto sells two products: X and Y. The contribution margin ratio for X is 40 per cent and for Y is 50 per cent. If the proportion of sales of X decreases, what will happen to the weighted average contribution margin?

• A) Increase
• B) Decrease
• C) Remain the same
• D) Changes in sales volume do not affect weighted average contribution margin

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Definitions:

Liability

Legal responsibility for one's actions or omissions, which can result in an obligation to compensate any harm caused to others.

Limited Partner

An investor in a partnership who is not involved in the day-to-day operations and whose liability is limited to the amount invested in the business.

Limited Partnership

A partnership consisting of at least one general partner and one or more limited partners, with differing liabilities and investment commitments.

Liable

Legally responsible or obligated, often in the context of debts or legal judgments.