Discussion
Multi-product break-even analysis requires an assumption about the
Answer: D
Correct answer: sales mix between the products
With several products there is no single contribution per unit, so a break-even in units is meaningless until it is assumed that the products sell in a fixed proportion. That assumed mix allows a weighted average contribution to be computed and a break-even found - but the answer is valid only at that mix, and a shift in mix moves the break-even point without any change in prices or costs.
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