If selling price per unit and sales volume remain the same while variable costs per unit decrease and total fixed costs decrease, which of the following is false:

Question

Quizplus · Accepted Answer

When variable costs per unit decrease, the contribution margin per unit and contribution margin ratio both increase, leading to an increase in net operating income, especially when total fixed costs also decrease. Therefore, net operating income will not decrease.

If Selling Price Per Unit and Sales Volume Remain the Same