If the Fixed Costs for a Product Decrease and the Variable

question 2

Multiple Choice

If the fixed costs for a product decrease and the variable costs (as a percentage of sales dollars) decrease,what will be the effect on the contribution margin ratio and the break-even point respectively?

• A)a
• B)b
• C)c
• D)d

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Definitions:

MAD

Mean Absolute Deviation, a measure used in statistics to quantify the average absolute dispersion or deviation from the mean or average.

Materials Management

The function responsible for planning, sourcing, moving, and storing materials required to produce goods and services.

Physical Supply

The actual, tangible products and raw materials available in the market or held by a company.