Assume That Selling Price Is Greater Than Variable Cost

question 29

Multiple Choice

Assume that selling price is greater than variable cost.Now suppose the selling price and the variable cost per unit increase by $5.00.What effect would these changes have on the contribution margin in dollars and on the contribution margin ratio?
Dollar contribution margin
Contribution margin ratio

• A) Increase
• Increase
• B) Decrease
• Decrease
• C) No change
• No change
• D) No change
• Decrease

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