If selling price per unit increases,how will this affect the contribution margin and breakeven point?

Question

Quizplus · Accepted Answer

If selling price per unit increases, the contribution margin will increase as well because the additional revenue generated from the price increase will contribute directly to the contribution margin. As a result, the breakeven point will decrease because each unit sold will contribute more towards covering fixed costs. Therefore, B is the correct choice as it correctly reflects the relationship between selling price, contribution margin, and breakeven point.

If Selling Price Per Unit Increases,how Will This Affect the Contribution