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:
A) Lower.
B) Higher.
C) Unchanged.
D) Cannot determine with the information given.

Question

Quizplus · Accepted Answer

The contribution margin ratio depends on the relative changes in the variable cost and selling price. Without knowing the extent of these changes, we cannot determine if the ratio will be higher, lower, or unchanged.

If Both the Variable Cost Per Unit and the Selling