When the Variable Cost Ratio Decreases, The

question 65

Multiple Choice

When the variable cost ratio decreases, the:

• A) Contribution margin as a percentage of net sales increases
• B) Contribution margin as a percentage of net sales decreases
• C) Break-even point increases
• D) Fixed cost per unit increases

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Definitions:

Critical Thinking

The intellectual process of actively and skillfully conceptualizing, applying, analyzing, synthesizing, and evaluating information to reach an answer or conclusion.

Alternative Explanations

Different theories or reasons that explain a phenomenon or observation, often considered when the primary explanation is insufficient.

Emotional Reasoning

A cognitive process where an individual bases their beliefs and decisions on their emotions rather than on objective reality.

Cognitive Perspective

A psychological approach that emphasizes mental processes in perception, memory, language, problem solving, and other areas of behavior.