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Edlintics

Sales mix

Sales mix is the proportions in which a company sells its different products. It determines the overall contribution margin and where the break-even point falls, because each product contributes differently.

Also known asproduct mix

ByHoang TruongUpdated

FrameworkCost-volume-profit (CVP) analysis

See it move

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A single horizontal bar representing the full sales basket is divided into two segments: Coffee at 60% of volume with a contribution margin of €2.00 per unit, and Tea at 40% with a contribution margin of €1.20. The weighted average contribution margin is (0.60 × €2.00) + (0.40 × €1.20) = €1.68. Shifting the mix toward coffee lifts the blended margin even when total units sold remain unchanged.

Where it fits
SubjectCost AccountingAdvancedTopicCost-Volume-Profit AnalysisAdvanced

The formula

LaTeX
CM‾=∑iCMi⋅wi\overline{CM} = \sum_i CM_i \cdot w_i

Variables

Contribution margin per unit of product i (€/unit)
Sales mix proportion of product i (must sum to 1)

Weights each product's CM by its share of total units. Used as the denominator in multi-product break-even.

LaTeX
Q∗=FCM‾Q^* = \frac{F}{\overline{CM}}

Variables

Total break-even units across all products
Total fixed costs (€)
Weighted-average contribution margin per unit (€/unit)

Holds the sales mix constant. Individual product break-even = Q* × wᵢ.