In a multiproduct environment, break-even and CVP analysis

• require that a constant product sales mix or “bag” assumption be used for the various products.

• require that a weighted average contribution mar¬ gin or CM ratio be calculated for each “bag” of product sold.

• state solutions in terms of “bags” of product, which means the solutions must be converted (using the original product sales mix) to actual units (or sales dollars) of individual products.

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