A 10 Percent Decrease in Sales Volume Will Result in

question 115

Multiple Choice

A 10 percent decrease in sales volume will result in

• A)A 10 percent decrease in total variable cost.
• B)A 10 percent decrease in per unit variable cost.
• C)A 10 percent increase in total variable cost.
• D)A 10 percent increase in per unit variable cost.

---

Definitions:

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials or commission on sales.

Fixed Expenses

Costs that do not change with the level of production or business activity.

Unit Contribution Margin

The amount by which the selling price of a unit exceeds its variable costs, indicating how much it contributes to covering fixed costs and generating profit.

Fixed Expenses

Expenses that remain constant regardless of production or sales volume, including rent, salaries, and insurance.