If the Total Contribution Margin Decreases and Fixed Costs Do

question 145

Multiple Choice

If the total contribution margin decreases and fixed costs do not change, pre-tax income

• A) Decreases by an equal amount
• B) Increases by an equal amount
• C) Does not change
• D) Increases by some other amount

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Definitions:

Sarbanes-Oxley Act

A U.S. federal law aimed at protecting investors from fraudulent accounting activities by corporations, enacted in 2002 in response to major corporate and accounting scandals.

Chief Financial Officer

A high-ranking executive responsible for managing the financial actions of a company, including financial planning, risk management, and financial reporting.

Annual Reports

Comprehensive reports issued yearly by companies to provide shareholders and other interested parties with detailed information on financial performance and operations.

Private Placement

The sale of securities or investment instruments directly to a select group of investors rather than through a public offering.