Once a firm reaches the breakeven point, the next unit sold will increase profit by an amount equal to the:
A) Selling price per unit
B) Variable cost per unit
C) Contribution margin per unit
D) Difference between contribution margin and fixed costs

Question

Quizplus · Accepted Answer

The contribution margin per unit represents the amount of revenue that is available to cover fixed costs and contribute to profits after variable costs are accounted for. Once breakeven is reached, each additional unit sold will contribute that amount directly to profits.

Once a Firm Reaches the Breakeven Point, the Next Unit