Assume Only the Specified Parameters Change in a CVP Analysis

question 166

Multiple Choice

Assume only the specified parameters change in a CVP analysis. The contribution margin percentage increases when ________.

• A) total fixed costs increase
• B) total fixed costs decrease
• C) variable costs per unit increase
• D) variable costs per unit decrease

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Definitions:

Specific

Clearly defined or identified; precise and not vague, ensuring that there is no ambiguity.

Performance Management

The heart and essence of leadership success; the process of performance planning, establishing direction and clarity of assignment; performance coaching, developing and encouraging others; and correcting poor performance, modifying and improving performance when mistakes are made.

Performance Planning

The process of setting objectives and expectations for employees, which serves as a foundation for measuring performance and guiding development activities.

Leadership

Social influence; showing the way or course of action; causing to follow by ideas and deeds; influencing through instruction, heroic feats, and force of will, magnified by the component of caring about the task to be done and the welfare of others; the functions or processes of establishing direction, aligning people and resources, and energizing people to accomplish results. See effective leadership.