Assume there is an increase in advertising expenditures and all other CVP parameters remain constant. This change will:
A)reduce operating income
B)reduce contribution margin
C)increase variable costs
D)increase selling price

Question

Quizplus · Accepted Answer

An increase in advertising expenditures will increase fixed costs, thereby reducing contribution margin and operating income. It will not affect variable costs or selling price.

Assume There Is an Increase in Advertising Expenditures and All