If the Fixed Costs for a Product Decrease and the Variable

question 107

Multiple Choice

If the fixed costs for a product decrease and the variable costs (as a percentage of sales dollars) decrease,what will be the effect on the contribution margin ratio and the break-even point,respectively? $$\begin{array} { | c | c | c | } \hline & \text { Contribution Margin Ratio } & \text { Break-eren Point } \\\hline \text { A. } & \text { Decreased } & \text { Increased } \\\hline \text { B. } & \text { Increased } & \text { Decreased } \\\hline \text { C. } & \text { Decreased } & \text { Decreased } \\\hline \text { D. } & \text { Increased } & \text { Increased } \\\hline\end{array}$$

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Misappropriation Theory

A theory in securities law that prohibits the trading of a company's stock or other securities by individuals who have access to non-public information about the company, under the belief that it is unfair to other investors who do not have access to the information.

Insider Trading

The unauthorized act of buying and selling stocks for personal gain by leveraging secret information.

Securities Regulation

The body of laws and rules governing the issuance, trading, and sale of securities to protect investors and ensure market integrity.

Stock Market Crash

A stock market crash is a rapid and often unanticipated decline in stock prices across a significant cross-section of a stock market, resulting in a loss of paper wealth.