If the Selling Price and the Variable Cost Per Unit

question 54

Multiple Choice

If the selling price and the variable cost per unit both increase 10 percent and fixed costs do not change,what is the effect on the contribution margin per unit and the contribution margin ratio?

• A)Contribution margin per unit and the contribution margin ratio both remain unchanged.
• B)Contribution margin per unit and the contribution margin ratio both increase.
• C)Contribution margin per unit increases and the contribution margin ratio decreases.
• D)Contribution margin per unit increases and the contribution ratio remains unchanged.

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Definitions:

Pension Expense

The cost recognized by an employer for maintaining a defined benefit retirement plan for its employees.

Service Cost

The portion of the pension expense that is attributed to the current year's service, representing the present value of benefits earned by employees during the year.

Pension Trustee

An individual or organization that holds and manages the assets of a pension fund on behalf of its beneficiaries.

Pension Plan

A retirement plan offered by an employer, providing financial benefits to employees upon retirement.