2C1H TICKER COMPANY SELLS TWO PRODUCTS. PRODUCT A PROVIDES A CONTRIB...
216.
CSO: 2C1c
LOS: 2C1h
Ticker Company sells two products. Product A provides a contribution margin of $3 per
unit, and Product B provides a contribution margin of $4 per unit. If Ticker’s sales mix
shifts toward Product A, which one of the following statements is correct?
a.
The total number of units necessary to break even will decrease.
b.
The overall contribution margin ratio will increase.
c.
Operating income will decrease if the total number of units sold remains constant.
d.
The contribution margin ratios for Products A and B will change.