Assume only the specified parameters change in a CVP analysis. The contribution margin percentage increases when ________.
A) total fixed costs increase
B) total fixed costs decrease
C) variable costs per unit increase
D) variable costs per unit decrease

Question

Quizplus · Accepted Answer

When the variable costs per unit decrease, the contribution margin increases because there is more revenue left over after covering variable costs. This results in a higher contribution margin percentage.

Assume Only the Specified Parameters Change in a CVP Analysis