Assume the linear cost relation of the cost-volume-profit model for a single-product firm, and use the following answer key:
(1) More than double
(2) Double
(3) Increase, but less than double
(4) Remain the same
(5) Decrease
Complete each of the following statements, assuming that all other things (such as quantities) remain constant.
a. If price doubles, revenue will ____________________________.
b. If price doubles, the total contribution margin (contribution margin per unit × number of units) will ____________________________.
c. If price doubles, profit will ____________________________.
d. If contribution margin per unit doubles, profit will ____________________________.
e. If fixed costs double, the total contribution margin will ________________________.
f. If fixed costs double, profit will ____________________________.
g. If fixed costs double, the break-even point of units sold will _____________________.
h. If total sales of units double, profit will __________________________.
i. If total sales dollars double, the break-even point will _________________________.
j. If the contribution margin per unit doubles, the break-even point will ______________.
k. If both variable costs per unit and selling price per unit double, profit will _________.