There Is an Important Relation Between Contribution Margin and Profit

question 153

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 decreases, total contribution margin decreases, but fixed costs remain the same.
D)All of these ans choices are correct.

• 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 decreases, total contribution margin decreases, but fixed costs remain the same.
• D)All of these ans choices are correct.

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Definitions:

Auditor Liability

pertains to the legal responsibility auditors bear for failing to detect or report inaccuracies in financial statements they audit, leading to damages for users of these statements.

Normal Audit

A regular examination and evaluation of an entity's financial statements and records to ensure accuracy and compliance with accounting standards and regulations.

Professional Responsibilities

Duties and obligations associated with a profession, often guided by codes of conduct to ensure ethical and competent practice.

Breach of Contract

Occurs when one party fails to fulfill their obligations as outlined in a contract, justifying legal action by the non-breaching party.