The contribution margin must increase as:
A) Both the sales price and variable cost per unit increase.
B) The fixed cost per unit declines.
C) The gap between the sales price and the variable cost per unit widens.
D) Sales price per unit declines.
E) The sales price minus the fixed cost per unit increases.

Question

Quizplus · Accepted Answer

The contribution margin increases when the difference between the sales price and the variable cost per unit increases, as it directly contributes more to covering fixed costs and generating profit.

The Contribution Margin Must Increase As