Question
7. Why are breakeven sales dollars different when considering the weighted average contribution margin for the sales mix than when the average contribution margin (without
7. Why are breakeven sales dollars different when considering the weighted average contribution margin for the sales mix than when the average contribution margin (without considering the sales mix) is used? What costs are not captured in the calculation? Hint: see Table I and Operations and Internal Controls above.
Table I Product categories, sales mix, and gross profit percentages Average selling price Average gross profit percent Percent of Category total sales $1.24 $1.50 $1.00 $1.25 Coffee and tea 17 57 Bottled and canned beverages Snacks and candy 48 55 29 38 Other 29 Total 100.0 Note: The gross profit percentages do not factor in product expiration or spoilage, incidental supplies, unrecorded sales, or theft
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Accounting Business Reporting For Decision Making
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