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The break-even point may change when the sales mix changes.
a. True
b. False

1 Answer

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Final answer:

The break-even point does change with alterations in the sales mix. This is because different products influence total revenues and variable costs, thereby impacting the volume of sales needed to break even.

Step-by-step explanation:

The statement that the break-even point may change when the sales mix changes is true. The break-even point is the level of sales at which total revenues equal total costs, resulting in no profit and no loss. The sales mix refers to the combination of different products or services that a company sells. Changes in this mix can affect both the total revenues and the total variable costs because different products typically have different selling prices and variable costs. Consequently, if a company sells more of a high-margin product, the break-even point would decrease, since it would need to sell fewer units to cover its fixed costs. Conversely, if more of a low-margin product is sold, the break-even point would increase, necessitating higher sales volumes to reach that point.

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