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How does sale mix affect the calculation of break-even point

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1. If management chooses to reduce its selling price to match that of a competitor, how will the break-even point be affected?

2. What is meant by the term sales mix? How does sales mix affect the calculation of the break-even point?

3. Performance Company sells two types of performance tires. The lower-priced model is guaranteed for only 50,000 miles; the higher-priced model is guaranteed for 150,000 miles. The unit contribution margin on the higher-priced tire is twice as high as that of the lower-priced tire. If the sales mix shifts so that the company begins to sell more units of the lower-priced tire, explain how the company's break-even point in units will change.

Reference no: EM13888942

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