ACCA PM · Chapter 5 · Question 6 of 10
A company prepares a multi-product profit-volume chart that plots each product individually. In what order should the products be plotted?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) In order of decreasing contribution to sales ratio, starting with the highest
Explanation
On a multi-product P/V chart the products are plotted in order of their C/S ratios, highest first, so the line rises most steeply at the start. This produces a bow-shaped line above the straight line joining the start and end points, which represents the average mix.
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