All Else Constant,as the Variable Cost Per Unit Increases,the

question 49

Multiple Choice

All else constant,as the variable cost per unit increases,the:

• A) contribution margin decreases.
• B) sensitivity to fixed costs decreases.
• C) degree of operating leverage decreases.
• D) operating cash flow increases.
• E) net profit increases.

---

Definitions:

Capital

Financial assets or the financial value of assets, such as cash and goods, used by a business to generate income.

Stockholders

People or organizations holding one or more shares in a corporation, thereby having partial ownership of the business.

Legal Capital

The minimum amount of capital that a company is required to maintain by law, often used to protect creditors and shareholders.

Financial Loss

A decrease in net income that results from operating activities, investments, and changes in fair value of assets, exceeding the income from these activities.