Concept related to breakeven point


Simpson company sells two products, A and B. Product A has a contribution margin of $2/unit. Product B has a contribution margin of $3/unit. The current sales mix is 50% product A and 50% product B. If the sales mix changes to 60% product A and 40% product B then the breakeven point, in number of units,

A. Increase

B. Decreases

C. Doesn't change

D. Either increase, decrease or remain unchanged. It's impossible to tell.

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Accounting Basics: Concept related to breakeven point
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