Which of the Following Statements Is TRUE If the Variable

question 91

Multiple Choice

Which of the following statements is TRUE if the variable cost per unit decreases while the sales price 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:

Adjusting Entries

Journal entries made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Liability and Asset Accounts

Accounts on a balance sheet that represent obligations to pay others (liabilities) and resources owned by a company (assets).

Financial Statements

Official accounts detailing the economic operations and condition of an enterprise, person, or any other unit.

Unearned Legal Fees

Money received by an entity for legal services yet to be performed, recognized as a liability until the services are rendered.