Contribution to sales ratio suits multi-product analysis

Steps:

• Recall contribution per unit measures profit contribution per item sold, ideal for single-product or uniform scenarios.
• Identify contribution to sales ratio (contribution margin percentage) as total contribution divided by total sales, expressing efficiency as a proportion.
• Recognize that multi-product businesses have varying prices and volumes, making per-unit calculations inconsistent without ratios for aggregation.
• Conclude ratio is preferred when blending products, unlike single-product cases favoring per-unit metrics.

Why B is correct:

• For multiple products, contribution to sales ratio enables a weighted average across items with different selling prices, using the formula (total contribution / total sales) × 100 for overall profitability assessment.

Why the others are wrong:

• A: Break-even in units relies on contribution per unit (fixed costs ÷ contribution per unit) for direct quantity calculation.
• C: Uncertain fixed costs affect break-even broadly but do not necessitate ratio over per-unit contribution.
• D: Limiting factors prioritize contribution per unit of the scarce resource, not sales ratio.

Final answer: B