When the Variable Cost Per Unit Decreases,the Contribution Margin on Each

question 202

True/False

When the variable cost per unit decreases,the contribution margin on each unit sold also decreases.

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Definitions:

Earnings Multiple

A valuation metric that indicates the ratio of a company's market price per share to its earnings per share (EPS), commonly used to gauge stock valuation.

Earnings Multiple

A valuation metric that shows how much investors are willing to pay for one dollar of earnings; commonly used in the P/E (price-to-earnings) ratio.

Extraordinary Item

Transactions and events that are both unusual and infrequent in nature, distinctly separate from the ordinary activities of the company, often excluded from the assessment of its ongoing operational performance.

Transitory Earnings

Earnings that are considered to be non-recurring or not indicative of the company's future earning potential.