Assume only the specified parameters change in a cost-volume-profit analysis.If the contribution margin increases by $6 per unit,then ________.
A) fixed costs increases by $6 per unit
B) operating profits decreases by $6 per unit
C) fixed costs decreases by $6 per unit
D) operating profits increases by $6 per unit

Question

Quizplus · Accepted Answer

An increase in contribution margin means that each unit sold contributes $6 more towards covering fixed costs and increasing operating profits. Therefore, operating profits will increase by $6 per unit.

Assume Only the Specified Parameters Change in a Cost-Volume-Profit Analysis