All else equal, 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 variable cost per unit declines.
D)sales price per unit declines.
E)the sales price minus the ﬁxed cost per unit increases.

Question

Quizplus · Accepted Answer

Contribution margin is the difference between the sales price per unit and the variable cost per unit. Therefore, as the variable cost per unit declines, the contribution margin will increase.

All Else Equal, the Contribution Margin Must Increase As