Assume There Is a Reduction in the Selling Price and All

question 35

Multiple Choice

Assume there is a reduction in the selling price and all other CVP parameters remain constant. This change will:

• A)increase contribution margin
• B)reduce fixed costs
• C)increase variable costs
• D)reduce operating income

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Definitions:

Formal Investment

The act of putting money into financial schemes, shares, property, or a commercial venture with the expectation of achieving a profit, typically through an official or regulated framework.

Bootstrapping

Starting a business with minimal financial resources and relying on one's own efforts and funds rather than seeking significant external funding.

Customer Base

The group of customers who repeatedly purchase the goods or services of a business, representing the business's main source of revenue.

Crowdfunding

Securing capital for a project or business by requesting small financial contributions from a large group of individuals, mainly via online channels.