Which of the following occurs if a company reduces its variable cost per unit? (assume that selling price per unit, sales volume, and total fixed cost remain constant) a. the contribution margin would decrease b. the contribution margin would increase c. net income would decrease d. the break-even point would increase e. more than one of the answers could occur Cost-Volume-Profit Analysis assumes that ANS: a. The average fixed cost per unit is constant as activity changes b. The average variable cost per unit is constant as activity changes C. The efficiency and productivity of production process and workers will change to reflect manufacturing advances d. Variable costs are nonlinear e. Total costs are constant as activity changes Corporation is in the process of preparing its annual budget. The following beginning inventory levels are planned for the year. Sales are projected to be 45,000 units for the year. Beginning inventory Ending inventory Finished goods (units) 7,018 3,532 Raw materials (grams) 7,954 4,044 Each unit of finished goods requires 3 grams of raw material. How many grams of the raw material should the company purchase during the year