There Is an Important Relation Between Contribution Margin and Profit

question 16

Multiple Choice

There is an important relation between contribution margin and profit.Which of the following statements is not true?

• A)As the number of units sold increases, total contribution margin increases, but fixed costs remain the same.
• B)As the number of units sold rises, profit increases by the additional contribution margin per unit.
• C)As the number of units sold decreases, total contribution margin decreases, but fixed costs remain the same.
• D)As the number of units sold falls, profit increases by the additional contribution margin per unit.

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Definitions:

Tautology

A statement that is inherently true in every possible interpretation due to its logical structure.

Biconditional

A logical statement in which both parts are mutually dependent: if one is true, the other must be true, and vice versa.

Self-Contradiction

A statement that inherently contradicts itself, asserting and denying the same thing, thereby being false in all situations.

Main Component

The primary or most important part of a system, device, or mechanism.