When contribution margin per unit increases:

Name: When contribution margin per unit increases:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Break-even output is the level of output at which total revenue equals total cost, specifically fixed costs and variable costs. As contribution margin per unit increases, the amount of revenue from each unit sold that goes towards covering fixed costs increases. This means that a firm can break even at a lower level of output, resulting in a decrease in break-even output.

When Contribution Margin Per Unit Increases