If sales price and the unit variable cost remain constant and fixed costs decrease, contribution margin will

Name: If sales price and the unit variable cost remain constant and fixed costs decrease, contribution margin will
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The contribution margin is calculated as sales price per unit minus variable cost per unit. Since both of these remain constant and the change is in fixed costs, the contribution margin per unit will also remain the same. Fixed costs do not affect the contribution margin per unit.

If Sales Price and the Unit Variable Cost Remain Constant