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Peak Company sells three different products that are similar, but are differentiated by various product features. Budgeted sales by product and in total for the
Peak Company sells three different products that are similar, but are differentiated by various product features. Budgeted sales by product and in total for the coming year are shown below: Product Standard Deluxe Premium Total Percentage of total sales 58% 10% 32% 100% Sales $120,000 $50,000 $80,000 $250,000 Less: Variable costs 36,000 40,000 44,000 120,000 Contribution margin $ 84,000 $10,000 $36,000 $130,000 Less: Fixed expenses $117,000 Net operating income $ 13,000 If the actual percentage of sales for the year were Standard, 50%; Deluxe, 40%; and Premium, 10%, than Select one: A. the overall contribution margin would decrease and break-even sales would decrease. B. the overall contribution margin would increase and break-even sales would increase. C. the overall contribution margin would decrease and break-even sales would increase. D. the overall contribution margin would increase and break-even sales would decrease
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