Accounting · Cost Accounting
Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: In a manufacturing enterprise selling multiple products, a change in the sales mix will inherently result in a change to the overall Break-Even Point (BEP) of the firm, even if individual product selling prices and total fixed costs remain constant. Reason R: Changes in the sales mix alter the weighted average (composite) P/V ratio, which serves as the denominator in the calculation for the overall Break-Even Point in sales value. In the light of the above statements, choose the most appropriate answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both A and R are correct but R is NOT the correct explanation of A
- 2A is correct but R is not correct
- 3Both A and R are correct and R is the correct explanation of A✓
- 4A is not correct but R is correct
Correct answer
Both A and R are correct and R is the correct explanation of A
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