Lo 3.4explain what a sales mix is and how changes in the sales mix affect the break-even point.

Explanation:

We can define the sales mix as the proportion of products sold in a company. A calculation is made to establish the proportion of sales of a particular product and how profitable it is for a company. The calculation is performed according to the productive capacity of the company and the need of consumers for a given product.

By knowing the sales mix, you can determine the breakeven point, which corresponds to the point at which total cost and total revenue are equal.

When there is a change in the sales mix, it significantly affects the breakeven point because different products have different expenses, contribution margins, and selling price, so any change in the sales ratio of a given product will impact the breakeven point.

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