Assuming a Company's Income Statement Shows a Net Operating Income

question 17

Multiple Choice

Assuming a company's income statement shows a net operating income, which of the following statements is true regarding the contribution margin per unit?

• A) It will decrease as the number of units sold increases.
• B) It will decrease as the number of units purchased decreases.
• C) It indicates the amount that net operating income will increase with the sale of each additional unit.
• D) It indicates the amount that variable costs will decrease with the sale of each additional unit.