Multi-product Firms (Sales-mix)

So far, we have confined our discussion to a one-product company. However, many manufacturers make more than one type of product. The relative proportion of each product sold in the aggregate sales is known as the sales-mix. A changes in the mix of products sold usually affects the weighted average P/V ratio and hence, the BEP. Thus, when the products have different P, V ratios, changes in the sales mix/product mix will affect the BEP and the results from operation.

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