Edward sell two product with selling price and contribution as follow Product f product g Selling price 40 20 Contribution 10 4 Budgeted sale 150000 100000 Unit
Edward fixed cost are 14000000 per year Edward now anticipates that more Customer will buy the cheaper product g and that budgeted sales will be 150000 unit for each product.
If this happen what would happen to the breakeven revenue??
C/s ratio of product g is lower i think mix will reduce i got this point but breakeven revenue will increase by an amount but not by the amount of extra sales of product g this is not relevant why sir