After the level of volume exceeds the break-even point
A)the contribution margin ratio increases.
B)the total contribution margin exceeds the total fixed costs.
C)total fixed costs per unit will remain constant.
D)the total contribution margin will turn from negative to positive.

Question

Quizplus · Accepted Answer

The break-even point is where the total contribution margin equals the total fixed costs. Once the level of volume exceeds the break-even point, the total contribution margin will exceed the total fixed costs, resulting in a profit. Therefore, B is the correct choice. A is incorrect because the contribution margin ratio remains the same. C is incorrect because fixed costs are not related to the level of volume. D is incorrect because the total contribution margin can not turn from negative to positive only based on the volume.

After the Level of Volume Exceeds the Break-Even Point