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There are two lines in the graph. One straight line (standard mix) and the other bowed (according to c/s ratio).
I wanted to ask whether The bowed line will always be above the straight?
Hi – yes it will. The bowed line assumes that products are sold in order of most profitable first- eg sales will be made in order of the highest individual c/s ratio first. Therefore the bowed/ bent/ crooked line will be above the straight one because it shows how selling most profitable products will result in breakeven point being earlier than the straight line ( which assumes sales in standard sales mix proportions).
Many Thanks
Cath
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