Which of the Following Is True Regarding the Contribution Margin

question 151

Multiple Choice

Which of the following is true regarding the contribution margin ratio of a single product company?

• A) As fixed expenses decrease, the contribution margin ratio increases.
• B) The contribution margin ratio multiplied by the variable expense per unit equals the contribution margin per unit.
• C) If sales increase, the dollar increase in net operating income can be computed by multiplying the contribution margin ratio by the dollar increase in sales.
• D) The contribution margin ratio increases as the number of units sold increases.

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Definitions:

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach, aiming to assess their relative purchasing power.

GDP Data

Statistical information that reflects the market value of all final goods and services produced within a country in a given period, used to analyze economic health.

Economic Measures

Economic measures are indicators or metrics used to assess the economic performance or health of an entity, such as GDP, unemployment rates, or inflation.

GDP

Gross Domestic Product (GDP) measures the total value of all goods and services produced over a specific time period within a country's borders.