There Is an Important Relation Between Contribution Margin and Profit

question 104

Short Answer

There is an important relation between contribution margin and profit.Which of the following statements is not true?
A) As the number of units sold increases, total contribution margin increases, but fixed costs remain the same.
B) As the number of units sold rises, profit increases by the additional contribution margin per unit.
C) As the number of units sold increases, total contribution margin and fixed costs increase.
D) As the number of units sold decreases, total contribution margin decreases, but fixed costs remain the same.

• A) As the number of units sold increases, total contribution margin increases, but fixed costs remain the same.
• B) As the number of units sold rises, profit increases by the additional contribution margin per unit.
• C) As the number of units sold increases, total contribution margin and fixed costs increase.
• D) As the number of units sold decreases, total contribution margin decreases, but fixed costs remain the same.

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