Which of the Following Statements Is True If the Sales

question 217

Multiple Choice

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

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

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Definitions:

Date of Declaration

The specific date on which a company's board of directors announces its intention to pay a dividend to shareholders.

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid in a given year, and must be paid out before common stock dividends.

Par Common Stock

The nominal or face value assigned to common stock by the issuing company.

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid in a given period and must be paid out before common dividends can be distributed.