Assuming all other things are the same, contribution margin per unit must have ____ if there was an increase in the break-even point.
A)remained the same
B)increased first, then decreased
C)increased
D)decreased

Question

Quizplus · Accepted Answer

Contribution margin per unit is the amount of money that is left over after the variable costs per unit have been subtracted from the selling price per unit. If the break-even point increases, it means that more units need to be sold to cover fixed costs. This implies that the total contribution margin will increase, but the contribution margin per unit will decrease. Therefore, the best choice is D: decreased.

Assuming All Other Things Are the Same, Contribution Margin Per