An increase in contribution margin per unit can be created by a(n)________ in sales price per unit and a(n)________ in variable costs per unit.

Question

Quizplus · Accepted Answer

An increase in sales price per unit will increase the contribution margin per unit because a higher price means more revenue per unit. A decrease in variable costs per unit will also increase the contribution margin per unit because the company will be spending less money to produce each unit, increasing the profit margin. Therefore, the best choice is A, where there is an increase in sales price per unit and a decrease in variable costs per unit.

An Increase in Contribution Margin Per Unit Can Be Created