Z plc currently sells products Aye, Bee and Cee in equal quantities and at the same selling price per unit. The contribution to sales ratio for product Aye is 40 per cent; for product Bee it is 50 per cent and the total is 48 per cent. If fixed costs are unaffected by mix and are currently 20 per cent of sales, the effect of changing the product mix to:

Aye 40%

Bee 25%

Cee 35%

is that the total contribution/total sales ratio changes to:

(a) 27.4%

(b) 45.3%

(c) 47.4%

(d) 48.4%

(e) 68.4%
(2 marks)
CIMA Stage 2