Which of the following statements is TRUE if the variable cost per unit decreases while the sales price per unit and total fixed costs remain constant?

Question

Quizplus · Accepted Answer

If the variable cost per unit decreases, the total contribution margin per unit increases because the revenue per unit (sales price) remains constant. Therefore, the contribution margin ratio (contribution margin per unit divided by sales price per unit) also increases. This means that each unit sold contributes more towards covering fixed costs, which results in a lower breakeven point.

Which of the Following Statements Is TRUE If the Variable