GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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change in sales change in sales mix
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cost reduction policies
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developing a rational capital expenditure policy
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enhancing return on investment
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Detailed explanation-1: -What Is the Sales Mix? The sales mix is a calculation that determines the proportion of each product a business sells relative to total sales. The sales mix is significant because some products or services may be more profitable than others, and if a company’s sales mix changes, its profits also change.
Detailed explanation-2: -Sales mix percentage is the number of one product’s sales divided by the number of total products sold.
Detailed explanation-3: -Sales mix refers to the ratio of the various products and services a company offers. It reflects each item sold and the profit margin it generates.
Detailed explanation-4: -Answer and Explanation: The shift of sales mix towards the product generating a lower contribution margin will result in a higher break-even point and lower net income. This shift will reduce the average contribution margin for the new sales mix and the total contribution margin will also reduce due to this shift.