A company has fixed costs of $1,200 and a per-unit contribution margin of $4. Which of the following statements is true?

Each unit "contributes" $4 toward covering the fixed costs of $1,200.

The situation described is not possible and there must be an error.

Once the break-even point is reached; the company will increase income at the rate of $4 per unit.

The firm will definitely lose money in this situation.

Each unit "contributes" $4 toward covering the fixed costs of $1,200 and Once the break-even point is reached, the company will increase income at the rate of $4 per unit.