Problem:
Each of a company's several product lines has a different contribution margin ratio. Total sales in 2004 were 20% higher than total sales in 2003. Total contribution margin for 2004 will be:
the same as it was in 2003, regardless of changes in sales mix.
20% higher than it was in 2003, regardless of changes in sales mix.
more than 20% higher than it was in 2003, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2004 than in 2003.
less than 20% higher than it was in 2003, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2004 than in 2003.