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 gap between the sales price and the variable cost per unit widens.
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 sales price per unit and variable cost per unit. Thus, for contribution margin to increase, the gap between sales price and variable cost per unit must widen.

The Contribution Margin Must Increase As