If the Fixed Costs for a Product Decrease and the Variable

question 138

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?
$\begin{array}{cc}\text { Contribution Margin Ratio }&\text { Break-even Point }\end{array}$
A. $\begin{array}{cc} &&& \text { Decrease } &&&&&&& \text { Increase } \\\end{array}$
B. $\begin{array}{cc} &&& \text { Increase } &&&&&&& \text { Decrease } \\\end{array}$
C. $\begin{array}{cc}&&& \text { Decrease } &&&&&&& \text { Decrease } \\\end{array}$
D. $\begin{array}{cc}&&& \text { Increase } &&&&&&& \text { Increase } \\\end{array}$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

---

Definitions:

Reinforcement Theory

A psychological perspective focusing on how outcomes of behaviors affect the likelihood of those behaviors being repeated.

Focal Objects

Core items or subjects in a study or a field of interest that attract primary attention or analysis.

Physical Things

Objects or substances that have a tangible presence and can be perceived through the senses.

Attribution Theory

A psychological theory that attempts to explain how individuals determine the causes of others' behavior, attributing it to internal dispositions or to external situations.