Discussion
A firm hits its sales target in rupees but misses its profit target. A likely explanation is
Answer: A
Correct answer: the mix shifted toward lower-margin products
Revenue can be met by selling more of the cheaper, thinner-margin lines, and the profit will then fall short because the weighted average contribution is lower than budgeted. The other three explanations would all have raised profit rather than lowered it. This is the practical reason sales targets are set by product or by margin rather than by total revenue alone.
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