When the variable cost per unit increases,the contribution margin on each unit decreases.

Name: When the variable cost per unit increases,the contribution margin on each unit decreases.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is because contribution margin is calculated by subtracting variable costs per unit from the selling price per unit. When variable costs increase, the amount available to contribute to covering fixed costs and generating profit decreases, lowering the contribution margin.

When the Variable Cost Per Unit Increases,the Contribution Margin on Each