If the Sales Price Per Unit Increases While the Variable

question 63

Multiple Choice

If the sales price per unit increases while the variable cost per unit and total fixed costs remain constant, which of the following statements is true?

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

---

Definitions:

Service Charge

A Service Charge is a fee collected to pay for services related to a primary product or service, such as handling fees, maintenance, or repair services.

Receivables

Money owed to a company by its customers or others for goods or services that have been delivered or used but not yet paid for.

Cash Realizable Value

The net amount of cash that is expected to be generated from the conversion of assets.

Operating Cycle

The period of time it takes for a company to purchase inventory, sell it, and turn the sales back into cash.