Question
All else being equal, what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit increases? A Both
All else being equal, what happens to the unit contribution margin and the contribution margin ratio if the sales price per unit increases?
A Both unit contribution margin and contribution margin ratio increase.
B Unit contribution margin increases while contribution margin ratio decreases.
C Both unit contribution margin and contribution margin ratio decrease.
D Unit contribution margin decreases while contribution margin ratio increases.
The profit equation is:
A (Unit price Q) - (Unit variable costs Q) + Total fixed costs = Profit.
B (Unit price Q) - (Unit variable costs Q) - Total fixed costs = Profit.
C (Unit price Q) + (Unit variable costs Q) + Total fixed costs = Profit.
D (Unit price - Unit variable costs - Total fixed costs) Q = Profit.
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