Solved

If Both the Variable Cost Per Unit and the Selling

question 3

Multiple Choice

If both the variable cost per unit and the selling price per unit increase, the new contribution margin ratio in relation to the old contribution margin ratio will be:

Definitions:

Labor-Hour

A measure of the amount of work or labor time required or used to produce a good or service.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard cost of variable overhead that should have been incurred based on the efficiency of operations.

Favorable

An accounting term referring to actual results being better than projected or budgeted figures, often used in the context of variances.

Unfavorable

A term often used in finance and accounting to describe a variance or outcome that leads to a worse financial position than expected.