Which of the Following Statements Is CORRECT If Total Fixed

question 124

Multiple Choice

Which of the following statements is CORRECT if total fixed costs decrease while the sales price per unit and variable costs per unit remain constant?

• A) The contribution margin increases.
• B) The breakeven point increases.
• C) The contribution margin decreases.
• D) The breakeven point decreases.

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Definitions:

Accounting Equation

The foundation of double-entry bookkeeping, representing the relationship: Assets = Liabilities + Equity.

Debit-Credit Analysis

A fundamental accounting technique that balances debits and credits in financial transactions to maintain the equation of assets = liabilities + equity.

Credit Services

Financial services that provide customers with credit facilities to purchase goods or services, including loans, credit cards, and lines of credit.

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any jurisdiction.