Which of the Following Statements Is TRUE If the Sales

question 163

Multiple Choice

Which of the following statements is TRUE if the sales price per unit increases while the variable cost per unit and total fixed costs remain constant?

• A) The contribution margin increases and the break-even point decreases.
• B) The contribution margin decreases and the break-even point decreases.
• C) The contribution margin increases and the break-even point increases.
• D) The contribution margin decreases and the break-even point increases.

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Definitions:

Price Volatile

describes a market condition where prices fluctuate unpredictably and often, which can affect buying and selling decisions.

Premium Products

Goods of higher quality and price than regular items, often offering superior performance or prestige.

Higher Costs

Situations where the expenses associated with producing goods or services increase, which can impact profit margins and overall profitability.

Increased Quality

The enhancement or improvement of product standards, performance, or service over time.