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Flower Company Manufactures and Sells a Single Product That Has  Contribution margin per unit  Contribution margin ratio \begin{array} {cc } & \text { Contribution margin per unit } & \text { Contribution margin ratio } \\\end{array}

Question 74

Multiple Choice

Flower Company manufactures and sells a single product that has a positive contribution margin. If the selling price and variable costs both decrease by 5% and fixed costs do not change, then what would be the effect on the contribution margin per unit and the contribution margin ratio?
 Contribution margin per unit  Contribution margin ratio \begin{array} {cc } & \text { Contribution margin per unit } & \text { Contribution margin ratio } \\\end{array}
A.  Decrease  Decrease \begin{array} {cc } &&&&& \text { Decrease } &&&&&&&& \text { Decrease } \\\end{array}
B.  Decrease  No change \begin{array} {cc } &&&&& \text { Decrease } &&&&&&&& \text { No change } \\\end{array}
C.  No change  Decrease \begin{array} {cc } &&&&&\text { No change } &&&&&&&& \text { Decrease } \\\end{array}
D.  No change  No change \begin{array} {cc} &&&&& \text { No change } &&&&&&&& \text { No change } \\\end{array}


A) Option A
B) Option B
C) Option C
D) Option D

Correct Answer:

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