If the variable cost per unit increases while the sale price per unit and total fixed costs remain constant, which of the following statements is true?

Question

Quizplus · Accepted Answer

When the variable cost per unit increases while the sale price per unit and total fixed costs remain constant, the breakeven point in units will increase. This is because it will take more units sold to cover the increased variable costs and reach the breakeven point. The contribution margin ratio will remain the same as it is a ratio of contribution margin to sales revenue and is not affected by changes in variable cost per unit.

If the Variable Cost Per Unit Increases While the Sale