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I was studying multi product profit volume graph when I came across the term “constant standard mix”. What does it generally imply??
Context: either you sell products according to C/S ratios or constantly standard mix. So you get two lines on graph with different breakeven points.
Constant/ standard sales mix is the relative proportions in which a company’s products are sold. This is a simplification that is necessary to calculate multi product breakeven.
For example, If you assume standard sales mix is going to be 9 yellow widgets and 1 red widget.
This has a sales mix of 9:1 … you can assume for every 10 widgets you sell – there will be 9 yellow and 1 red … so for 100 widgets you will have 90 yellow 10 red. It can also be stated as a percentage – eg 90% yellow widgets and 10% red!
Hope that helps.
Cath
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