15 in multiproduct situations when sales mix shifts toward the product with the lowe 4309514

15) In multiproduct situations when sales mix shifts toward the product with the lowest contribution margin, the breakeven quantity will decrease.

16) In multiproduct situations when sales mix shifts toward the product with the highest contribution margin, operating income will be higher.

17) To calculate the breakeven point in a multiproduct situation, one must assume that the sales mix of the various products remains constant.

18) If a company's sales mix is 2 units of product A for every 3 units of product B, and the company sells 3,000 units in total of both products, only 2,000 units of product A will be sold.

19) Ken's Beer Emporium sells beer and ale in both pint and quart sizes. If Ken's sells twice as many pints as it sells quarts, and sells 2,400 items total, it will sell 800 quarts of ale.

20) Karen Hefner, a florist, operates retail stores in several shopping malls. The average selling price of an arrangement is \$30 and the average cost of each sale is \$18. A new mall is opening where Karen wants to locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following three options for its retail store rentals:

1.paying a fixed rent of \$15,000 a month, or

2.paying a base rent of \$9,000 plus 10% of revenue received, or

3.paying a base rent of \$4,800 plus 20% of revenue received up to a maximum rent of \$25,000.

Required:

a.For each option, compute the breakeven sales and the monthly rent paid at break-even.

b.B

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