Select the correct statement regarding the contribution margin ratio.
A) The contribution margin ratio can be calculated using either total amounts or per unit amounts.
B) The contribution margin ratio equals contribution margin per unit divided by variable cost per unit.
C) Total fixed costs divided by the contribution margin ratio equals the break-even point in units.
D) An increase in variable cost per unit will cause the contribution margin ratio to increase.

Question

Quizplus · Accepted Answer

The contribution margin ratio can be calculated using either total contribution margin divided by total sales or per unit contribution margin divided by per unit sales price, making statement A correct.

Select the Correct Statement Regarding the Contribution Margin Ratio